|Reuters / Mumbai Feb 22, 2012, 00:43 IST
Tata Motors will double investments in its Jaguar Land Rover brands to pound 1.5 billion a year, even as it warned that it will be a challenge to sustain high margins at its key profit generator.
With soaring revenues and expanding margins, Jaguar Land Rover (JLR) has driven the company's growth in recent quarters, as strong demand in emerging countries for the famous British brands offset sluggish performance in Tata's home market.
"Over the past five to six years, JLR has spent around pound 700-800 mn on annually on capital expenditure and product development. Going forward, we will double that," said Tata Motors CFO C R Ramakrishnan.
"JLR spending will be in the order of pound 1.5 billion each year," he said, adding that the increase would apply in the current financial year.
China JV soon
Tata has selected a joint venture partner for manufacturing JLR cars in China and is awaiting approval from government regulators in the world's fastest-growing auto market, the CFO said.
An announcement on the company's China joint venture will be made "very soon," he added, without giving details. JLR had agreed in principle to develop a luxury car with China's Chery Automobile in order to win approval for a manufacturing venture, a Chinese newspaper reported in December.
Fiat JV to stay
Tata's JV with Fiat SpA, through which the Italian automaker utilises the company's distribution network in India, is not producing the expected financial results or sales, Ramakrishnan said. Fiat and Tata have held meetings to discuss new measures to improve its sales in the country, Ramakrishnan added, but there were no plans to end the tie-up.