Jaguar and Land Rover Deny Building Plant

　　According a financial news media in Shanghai, Jaguar and Land Rover are expected to be produced in the city of Nanchang. Such a piece of news attracted wide attention within the automotive industry.

　　According to the news that Jaguar and Land Rover will be manufactured domestically and the new plant is expected to be built in Nanchang, the reporters of Economic Observer recently learned from Nanchang Municipal Government and Jaguar and Land Rover (China) that the news is simply media's speculation. In fact, Jaguar and Land Rover have not carried out any substantive contact with any local government as to the issue of domestic production. To a large extent, the rumor that a new plant may be built in Nanchang originated from local government's urgency of such an investment project.

　　Is building a plant in Nanchang just a rumor?

　　Chen Yihui is the Deputy Director of Xiao Lan Economic Development Zone of Nanchang who is responsible for the work of investment. During an interview with the reporters of Economic Observe on June 10, he admitted that the Economic Development Zone indeed had put forward the imitative about investment to Jaguar and Land Rover. However, both sides had not carried out any formal substantive contact. An official of Key Businesses Bureau of Nanchang Economic and Trade Office, who is responsible for automobile cooperation projects, told Economic Observer that those media reports that Jaguar and Land Rover will settle projects in Nanchang did not make sense.

　　According to the executives from public relations departments of Jaguar and Land Rover (China), they felt surprised on hearing the media reports that the domestic production project of Jaguar and Land Rover would be settled in Nanchang. A head from Public Relations Department of Land Rover (China) told Economic Observers, "As far as I know, we are just carrying out some market research work about the situation of Chinese market prior to the localization of production. As to the location of plant, investigation of the location and other specific tasks about localization, we haven't started yet".

　　Chen Yihui said:" After India Tata announced that Jaguar and Land Rover would be produced in China, we have been tracking the investment trends of those international famous auto brands. Jaguar and Land Rover are one of our targets." Chen is an official working in local government, who is responsible for investment. It is his daily work to introduce the regional advantages and investment environment to internationally renowned companies. But media misunderstood that Nanchang had won the Jaguar and Land Rover projects.

　　Chen Yihui told reporters that the Economic Development Zone had been increasing the intensity of attracting investment since at the end of May Tata Motors of India announced within two years it would achieve the domestic production of Jaguar and Land Rover. However, so far the Economic Development Zone has not received any feedback in the enterprise level. Xiao Lan Economic Development Zone is the largest auto parts industry base in Jiangxi Province, relying on JMC and other vehicle manufacturers. With cluster advantages of automotive industry, Xiao Lan Economic Development Zone has three automakers as well as more than 70 auto parts manufacturer including World Visteon, Lille and etc.

　　Enthusiasm of local government

　　“In order to attract more high-quality projects, the Economic Development Zone will provide a package of attractive investment policies ranging from land to tax. The Zone can even help the business get links with qualified automaker," Chen Yihui said. In accordance with relevant state policies, foreign automakers which plan to manufacture vehicles in China have to cooperate with domestic counterparts which also have the qualifications of producing cars. Foreign automakers have to go through acquisitions or joint ventures to set up factories in China to produce cars. In terms of the threshold of policies, Chen Yihui revealed that the Economic Development Zone can solve the problem.

　　Reporters learned that though the local government showed great enthusiasm, Jaguar and Land Rover did not easily make comments over the issue of domestic production. Some local officials like Chen Yihui felt distressed that they were eager to get contacts with relevant heads of automakers. They can just send letters of invitations to the headquarters of Land Rover in China. They have no idea about whom to contact. "If Economic Observer knows the executives of Tata in China, could you introduce them to us?" Chen said in a very sincere tone on phone.

　　Reporters learned that though Tata's Executive President announced that Tata would build a plant in China within two years, Tata Group has not sent a head who is responsible for automotive business to China. An official of Public Relations Department of Tata China recently pointed out that "though Tata is the controlling shareholder, Jaguar and Land Rover run their business across the world independently. You can only ask Jaguar and Land Rover about the business in China".

　　A head of Public Relations Department of Land Rover (China) said, “I did not know whether our company has such a department which is responsible for holding negotiations with local government officials who are in charge of investment." She said she had to ask the management about the issue of whether Land Rover has established such a department.

　　Domestic production is just a matter of time.

　　At the end of May, a foreign news report first revealed that Jaguar and Land Rover would start production in China. According to the report, Tata Motors of India planned to carry out domestic production of Jaguar and Land Rover within two years, aiming at lowering cost and expanding capacity. Tata's CEO even devised an ambitious plan for Chinese market that the annual output of Jaguar and Land Rover would total up to 40,000 units. Then those two high-end brands will no longer face high import tariffs.

　　It is reported that Tata Motors has confidence in the great consumption potentials and lower production cost in emerging markets such as China. Therefore it decided to localize the manufacturing of Jaguar and Land Rover. Now the sales in China account for 8% of the overall sales of Jaguar and Land Rover and the proportion is rising year by year. In Beijing Auto Show in April, the Chief Executive Officer of Land Rover China said that "the sales in Chinese market may exceed those of Britain and rank second in the world". For Land Rover, there is growing reliance on Chinese market.

　　However, Tata has not provided a specific timetable for the plan. It just announced that after determining the plant site there would be one to two years before production. Moreover, Tata will produce the cheapest car-Nano in the new plant in China. Nano sells for about 2,000 U.S. dollars and Tata's CEO revealed that Tata is working with partners which have intentions. But he did not disclose which company is in discussion with Tata.

　　It is reported that under India's Tata Group, Tata Motors was founded in the year of 1945 and is India's largest automobile company. In 2008, Tata Motors bought Jaguar and Land Rover for 2.5 billion dollars from Ford. However, some people believed that the deal was not promising. Some even said Jaguar and Land Rover were "money-losing" products. In the fiscal year of 2009, with the improvement of global economic environment and recovery of automotive market, Tata successfully turned around the business of Jaguar and Land Rover and made a bold plan to enter China.(Translator: Qinghua/Hanxin)

　　See Original Chinese Report Please Clicks:

　　http://auto.sohu.com/20100613/n272771438.shtml