Tata Motors drives JLR into the Chinese territory

The renovated luxury carmaker, British born and Indian owned, Jaguar and Land Rover has started its Chinese production plant at Changshu in the province of Jiangsu. The production plant was inaugurated by the Tata business conglomerate’s iconic leader -Ratan Tata. JLR is the wholly owned subsidiary of Tata Motors.

            The JLR’s renovation and transition from financial loss and fear of shut downs in many plants to luxury symbol of the emerging markets was an unbelievable one. Tata Motors brought the company by paying 1.5 bn British pounds. In 2011, the Company has made a pre-tax profit of 1.51 billion British pounds. The JLR now contributes to 91% of the Tata Motor’s profit.

            The JLR’s expected march into the Chinese market by joining peer competitors-Audi, Mercedz Benz, Volkswagen and BMW holds significance from many angles.

            This is the first instance where a major Indian manufacturing firm is able to establish its foot- prints in the Chinese market. More than anything else, the automobile industry is supposed to be a trial ground for the intense rivalry between the two emerging market powers.

            At present, the Chinese manufacturing firms in the electronic, electrical and telecom hardware sectors, like the Huwei, ZTE, TCL etc are having big market presence in India. On the other hand, the Indian presence in China is confined to a few IT companies.

            Another relevant issue is that the centre of global automobile industry is slowly shifting from the West to the emerging economies over the last ten years. The auto MNCs are migrating to the emerging world to locate their production and market the products. It is to be acknowledged that eighty percent of the JLR output from Britain is exported and China has emerged as the major market.

            A major development which indicates the rising status of the emerging world and decline of the advanced countries was the crisis at Ford Motor Corporation and the fall of the General Motors. GM was almost taken over by the Chinese giant, SAIC Motor Corporation. Meanwhile Tata Motors has acquired JLR from Ford. The SAIC is marketing the GM products in all markets including India.

The General Motors is almost transformed into China Motors now. Similarly, the JLR’s entry into the world’s new luxury market is a trend setter in the ‘global shift’ happening in the automobile industry. The game has just started, so more things are awaited.