THREE MONTHS after launching the world’s cheapest four-seater car, the Nano, Ratan Tata, the Indian owner of Jaguar Land Rover, introduced the two luxury vehicles into the domestic market, hoping to better the group’s flagging fortunes by targeting the emerging rich in India.
Foreign cars cost considerably more in India than they do overseas, especially in Europe, due to high import tariffs.
“The Indian market holds significant growth potential in the long term, and we hope to tap the demand for premium vehicles from discerning customers,” Jaguar Land Rover chief executive David Smith said at the launch in Mumbai at the weekend. “We have been successful in China and Russia. India has been a gap and we want to fill it.”
“We intend to extend the penetration of the two brands in the market and give Indian customers a chance to experience the brands,” said group chairman Ratan Tata.
Market analysts said Jaguar Land Rover was targeting the growing number of Indian dollar millionaires who, according to a recent report by Merrill Lynch Global Wealth Management and Capgemini, numbered 84,000 in late 2008.
This number had declined from 123,000 high net worth individuals a year earlier, due largely to a downturn in local equity markets and the continuing global recession.
“Both Jaguar and Land Rover are premium, niche and exclusive brands. We are looking at relatively small numbers. The challenge is to establish the brands here,” company managing director Phil Popham said, declining to elaborate on the number of vehicles the company aimed on selling.
Tata Motors, India’s largest maker of trucks, acquired Jaguar Land Rover from Ford Motor Company for $2.4 billion (€1.7 billion) last March.
The Mumbai-based conglomerate also operates hotels, owns communication and information technology services and is also emerging as a leading defence contractor.
Last year, it bought Corus, the Anglo-Dutch steel conglomerate, for $13 billion (€9.1 billion).
According to Bloomberg, in the 10 months to March 31st, 2009, sales of Land Rover fell by 39 per cent to around 120,000 compared to the same period in 2008, while those of Jaguar dropped 3 per cent to 47,000, leading to a pre-tax loss for Tata of some $374 million (€265 million).
The automaker is currently in advanced discussions with the British government for loan guarantees for Jaguar Land Rover, Ratan Tata said.
The global plunge in car sales, the worldwide economic crisis and a terrorist strike on Tata’s landmark Taj Mahal hotel in Mumbai last November that spawned revenue losses due to cancellations resulted in the company reporting its first annual consolidated loss in seven years for the financial year 2008-2009, ending March 31st.