Dec. 11 (Bloomberg) -- Tata Motors Ltd.’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.
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