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JLR mulls plant in Saudi Arabia, signs letter of intent

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Discussions between JLR and the Saudi government are at a preliminary stage, although opportunities have already been identified in aluminium component production.
Discussions between JLR and the Saudi government are at a preliminary stage, although opportunities have already been identified in aluminium component production.

Jaguar Land Rover, exploring an opportunity to start production in Saudi Arabia, has signed a letter of intent to begin a feasibility study.

The luxury car manufacturer has signed the LoI with Saudi Arabia’s National Industrial Clusters Development Program (NICDP). The British auto-maker, owned by India’s Tata Motors and NICDP will now begin a detailed feasibility study for setting up an automotive facility in the Middle Eastern country.

Discussions between JLR and the Saudi Government are at a preliminary stage, although opportunities have already been identified in aluminium component production. This is an area where JLR has established a leadership position, the company said in statement.

“We are committed to further international partnerships to meet record demand for our highly-sought after vehicles. The Kingdom of Saudi Arabia is an attractive potential development option, complementing our existing advanced facilities in Britain and recent manufacturing plans to expand in other countries including India and China,” JLR Chief Executive Officer Ralf Speth said.

Pending agreement on development options in Saudi Arabia, JLR is expected to announce further plans in 2013. Issues such as level of investment, potential capacity and job creation have not yet been discussed in detail between the parties.

The exploratory discussions about potential investment in Saudi Arabia follows JLR’s recent joint venture announcement with Chery Automobile Company to produce vehicles at a new plant near Shanghai, China. This is a separate expansion of the JLR assembly at the company’s plant in Pune, India.

Such expansion follows a sharp rise in JLR sales to emerging markets, contributing to a 32 per cent rise in global retail sales to 3,24,184 vehicles in the eleven months to November 30, 2012. In the current calendar year, sales in the Middle East and North Africa have increased by more than 9 per cent to 11,418 units.

The world’s largest integrated aluminium complex, a joint venture between Saudi Arabian Mining Company and Alcoa of the US, is due to begin production in 2014 at the Ras Al Khair facility. This would create potential opportunities for the automotive sector.

rajesh.kurup@thehindu.co.in

(This article was published on December 11, 2012)
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