Jaguar Land Rover Plans $1.2 Billion Factory in Saudi Ara

Tata Motors Ltd. (TTMT)’s Jaguar Land Rover luxury unit signed a letter of intent with Saudi Arabia’s government to study the feasibility of setting up a factory to build its models locally.

Jaguar Land Rover is now beginning a detailed study for the plant, the company said in an e-mailed statement. The initial investment is estimated at 4.5 billion riyals ($1.2 billion), the National Industrial Clusters Development Program, under the Saudi Arabian Ministry of Commerce & Industry, said in a separate statement today. The factory would produce 50,000 Land Rovers a year by 2017, it said.

“Saudi Arabia is an attractive potential development option,” Ralf Speth, Jaguar Land Rover’s chief executive officer, said in the company’s statement. “This is an exciting project that could enable Jaguar Land Rover to establish a joint venture partnership in a part of the world where luxury vehicle sales are expected to rise.”

The luxury carmaker is turning to emerging markets to offset slowing demand in Europe. The company said today it was expanding its assembly operations in India and in September announced that it had received approval to form a venture with China’s Chery Automobile Co. to begin building cars in the world’s biggest auto market.

Jaguar Land Rover, based in Gaydon, England, accounted for 67 percent of Tata Motors’ revenue in the three months ended Sept. 30. The automaker plans to invest 2 billion pounds ($3.2 billion) in the unit this year to develop new models and expand factories to cater to rising demand in China and Russia, and reduce its dependence on Europe.

To contact the reporters on this story: Glen Carey in Riyadh at gcarey8@bloomberg.net; Siddharth Philip in Mumbai at sphilip3@bloomberg.net

To contact the editor responsible for this story: Young-Sam Cho at ycho2@bloomberg.net

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.