Tata Motors and JLR to develop engines, vehicles

12 Jul 2010 Evaluate

Tata Motors has kick started a move to jointly develop engines and vehicles with its UK subsidiary, Jaguar Land Rover (JLR), over two years after its $2.3-billion acquisition of the British marques. Initiatives have been taken on joint development programmes for engines, vehicles and platforms, which would leverage skills of the company (Tata Motors) and JLR, resulting in synergies in operations of the company and its subsidiary.

 

The company informed its shareholders about the development, and sought their approval for raising up to Rs 4,700 crore in long-term funds. Tata Motors, however, did not elaborate on the various programmes that have been initiated with JLR and other subsidiaries. These would yield substantial savings in the operations of the company and its subsidiaries.

 

As part of its strategy to expand the company's domestic and global footprint, Tata Motors had announced it would invest about Rs 10,000 crore in the next two-three years in product development, facility modernization and other capex purposes.

 

Earlier, JLR had announced plans to increase sourcing of components from low-cost countries, including China and India, in the coming years to reduce input costs. Material cost is a significant challenge and JLR previously said over the next few years it would grow the amount of materials and components it purchases from lower cost countries. To facilitate sourcing from India and China, JLR had opened purchasing offices in the two countries in 2009.

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