Tata Motors set to pump £1.5 bn in JLR

Over the past 5 to 6 years,JLR has spent around 700 to 800 million pounds annually on capital expenditure and product development.

Written by Reuters | Mumbai | Published:February 22, 2012 2:06 am

Tata Motors will double investments in its Jaguar Land Rover brands to 1.5 billion pounds ($2.4 billion) a year,even as the Indian automaker warned that it will be a challenge to sustain high margins at its key profit generator.

With soaring revenues and expanding margins,Jaguar Land Rover (JLR) has driven the company’s growth in recent quarters,as strong demand in emerging countries for the famous British brands offset sluggish performance in Tata’s home market.

Over the past 5 to 6 years,JLR has spent around 700 to 800 million pounds annually on capital expenditure and product development. Going forward,we will double that,CR Ramakrishnan,Tata’s chief financial officer,said on Tuesday.

JLR spending will be in the order of 1.5 billion pounds each year,Ramakrishnan told reporters,adding that the increase would apply in the current fiscal year ending in March.

JLR contributed 95 per cent of the company’s profit in the quarter to end-December,with a profit margin of 20 per cent,three times the profitability seen at Tata’s domestic business.

Tata has selected a joint venture partner for manufacturing JLR cars in China and is awaiting approval from government regulators in the world’s fastest-growing auto market,Ramakrishnan said.

An announcement on the company’s China joint venture will be made very soon,he added,without giving details.

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