Jaguar Land Rover considers manufacturing in Saudi Arabia

Jaguar car The new Jaguar F-Type

Carmaker Jaguar Land Rover (JLR) is considering building cars in Saudi Arabia, it has said.

If it went ahead, it would be the Indian-owned company's second overseas manufacturing plant. It agreed to build a plant in Shanghai last month.

At this stage, an agreement with Saudi Arabia is limited to a letter of intent to start a feasibility study.

The company told the BBC that any new plant in Saudi Arabia would not lead to job losses in the UK.

JLR said overseas production would come in addition to the work done in the UK.

It has not yet decided whether Jaguar or Land Rover models would be best suited for such production.

The West Midlands-based luxury carmaker agreed a £1bn deal with Chinese manufacturer Chery Automobile last month.

Analysis

Though improved access to fast-growing markets in the Middle East will be attractive to JLR, the carmaker says it was mainly motivated by access to aluminium when it decided to look into manufacturing in Saudi Arabia.

JLR is using ever more aluminium in its Jaguar and Land Rover models in order to reduce their weight, which in turn helps it meet ever more stringent emissions regulations across the world.

Access to metals such as aluminium and other finite resources is set to become a major challenge for carmakers in the years ahead.

JLR hopes that an aluminium smelting plant that is scheduled to open in the country in 2014 would help it secure supplies.

The two plan to build a plant near Shanghai, which is due to open in 2015, to try to take advantage of the fast-growing market for cars in China, where sales of Jaguar Land Rover's vehicles have risen 80% in the past year.

JLR also has an assembly plant in Pune, India, where pre-manufactured parts are put together.

'Business case'

It is the construction of the world's largest aluminium smelting facility in Saudi Arabia that has attracted JLR's parent company Tata Motors to the kingdom.

Jaguar Land Rover relies on the lightweight metal aluminium for the manufacturing of its vehicles.

The smelter is a joint venture between Alcoa and the Saudi Arabian Mining Company, which combines mining, refining and production of the metal in one facility.

It is expected to produce the lowest-priced aluminium in the world when it starts work.

In an interview with Autocar India earlier this year, the chairman of Tata motors, Ratan Tata said: "This smelter could make the production of aluminium in Saudi Arabia very competitive."

"So taking a really long-term view, if we put an assembly plant there with a large press shop, given our commitment to aluminium in our products, we could have an interesting business case, which we are examining today."

More on This Story

Related Stories

More Business stories

RSS

Features

BBC © 2014 The BBC is not responsible for the content of external sites. Read more.

This page is best viewed in an up-to-date web browser with style sheets (CSS) enabled. While you will be able to view the content of this page in your current browser, you will not be able to get the full visual experience. Please consider upgrading your browser software or enabling style sheets (CSS) if you are able to do so.