Tata motors owned Jaguar and Land Rover is going to set up an engine assembly plant in India soon. The JLR Assembly plant for its SUVs will be operational form today (May 27, 2011) and in near future, an engine assembly plant which will be nearly the same as being built in Midlands UK. The UK plant is expected to become operational in coming few months after which the India plant will be set up in India. The Indian plant and the UK plant will have a combined capacity to produce 5,00,000 engines per year which will be less than 2 Litres in displacement. The larger engines will not be produced in these plants and will continue to be sourced from Ford.
Jaguar and Land Rover cars will not only be assembled in India, but also in China as Tata has decided to set up an assembly plant in China too. The sourcing of engines from Indian plant for assembling in India as well as China will make a lot of business sense in terms of cost of operations. The cost of serrating up a manufacturing unit in India and China is lower as compared to setting up the same in UK because of higher costs involved.
Also setting up plants in India will give JLR cost advantage because of the latest CKD duties increase after the union budget 2011 of India came into effect from April 2011. More such plants are expected to come up in India as slowly India is taking shape of a global automobile manufacturing hub for many global brands of the world.
source- ACI
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