Alluding to high taxes that the Indian government levies on automobiles manufactured in India, the head honcho of the Tata group, Mr Ratan Tata, has stated that the local manufacture of Jaguar and Land Rover luxury cars aren’t slated to happen in the near future. However, CKD assembly of cars under the Jaguar and Land Rover brands will continue in India, where Tata Motors is using the Chikli plant to assemble the likes of the Jaguar XF sedan and the Land Rover Freelander2 SUV through CKD kits imported into the country. In the coming months, more Jaguar-Land Rover models could join the CKD assembly list.
Plans are afoot to launch a CKD assembled version of the Jaguar XF sedan with the 2.2 Liter turbo diesel engine. This car is expected to be priced at under the INR 40 lakh mark, thus serving as the entry level car model in the Jaguar line up for the Indian car market. The competitively priced Jaguar XF 2.2 is expected to be a big seller for the brand, as this car will finally challenge the likes of Audi, BMW and Mercedes Benz in terms of pricing in the entry level luxury car space. Similarly, the Range Rover Evoque crossover could also assembled in India through the CKD route.
Even as Jaguar-Land Rover is aggressively boosting its dealership chain across India, these luxury brands are said to require volumes of about 10,000 cars a year to justify the investments required for local manufacture. So, it will still be some time before JLR begins manufacturing its luxury car and SUV range in India. Other luxury car makers like Audi, BMW and Mercedes Benz do have assembly facilities in India. However, even these brands have not begun local manufacture of any of their cars, citing lower volumes to be the reason for their reluctance to set up local manufacturing facilities.
The Indian government imposes steep import taxes on automobiles imported into the country through the completely built unit(CBU). However, the duties on the completely knocked down(CKD) kits imported into India are a fraction of what is charged for CBU imports. So, most luxury car makers have resorted to the CKD assembly route and this has also resulted in generating employment for a large number of Indians, along with higher investment on assembly facilities. The next big move from luxury car makers in local manufacture and given the current volumes, this move is not expected to happen within the next 2 years. However, when it does happen, expect a big surge in employment as well as investment in the country.