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Premium carmaker Jaguar Land Rover (JLR) sets up plant in Brazil

Brazil: Luxury car manufacturer Jaguar Land Rover has unveiled their fully owned facility in Brazil. The company announced an investment of USD350 million in 2013 in Brazil for the newly opened plant when the car sales were witnessing steep decline due to political turmoil in the country.

The move came as a result of rising interest rates, collapsing consumer confidence and high tariffs imposed on imports when the company decided to set up a fully owned plant in nation with a population of 200 million and joins other leading carmakers such as Volkswagen and General Motors in setting up manufacturing plant in the country.

“"The premium sector has more or less held its ground, so share of total industry has grown for premium and we've been able to robustly hold our position," said Julian Hetherington, the project director of JLR for Brazil. Other than the Brazil plant the company has also set up a plant in China as a part of Joint Venture with brand Chery making the Brazilian plant as company’s first fully owned facility outside United Kingdom.

From the new facility the company is expected to produce 10,000 units this year for both the models Land Rover Discovery Sport and Range Rover Evoque Sport. However, the annual capacity of the plant is around 24,000 units when fully operational. According to the manufacturing head of JLR Land Rover is one the prominent selling premium SUV brand in the country and accounts for one third of the total sales in this segment.

According to a recent report published by TechSci Research, Brazil Tyre Market Forecast & Opportunities, 2020’’, the replacement tire segment accounted for around 68% volume share in Brazil tire market in 2014. Moreover, replacement demand for tires is anticipated to grow at a faster rate during 2015-2020, as compared to OEM tire demand. As a result, the market share of replacement tire segment is expected to further increase through 2020. In 2014, Brazil was the fourth-largest auto market across the globe after China, US and Japan in terms of sales, and ranked seventh in terms of production. Growing domestic demand for automobiles, increasing per capita income levels of consumers and availability of skilled workforce have attracted significant foreign direct investments in the country over the last decade.

TechSci Research believes that, the company is among the leading premium carmakers globally and by setting up a wholly owned manufacturing facility in Brazil the company opens door for various prominent tire manufacturers for OEM tie ups. Also with the commencement of production for the luxury SUV in the country, the demand for tires are expected to fuel up in the country.

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