Jaguar Land Rover eyes factory in Saudi Arabia

Jaguar Land Rover (JLR) has paved the way for building a plant in Saudi Arabia as it eyes further expansion in fast-growing overseas markets.

The luxury car maker, owned by India’s Tata Motors, has signed a letter of intent with the Saudi government, which said the firm could build 50,000 Land Rovers a year at a plant costing about £745 million. Saudi Arabia, which does not have an existing car industry, is seeking to diversify its economy away from oil exports.

Azzam Shalabi, head of the industrial clusters programme at Saudi Arabia’s commerce and industry ministry, said the proposed plant could start production in 2017 and would be located in Yanbu on the Red Sea coast, although a JLR spokesman insisted the agreement was “purely exploratory” and it was too soon to provide firm details.

Talks about the investment follow JLR’s recent £1 billion joint venture agreement with the Chery Automobile Company to build vehicles at a new plant near Shanghai in China, and the separate expansion of the firm’s assembly plant at Pune in India.

The firm said the expansion plans follow a sharp rise in sales to emerging markets, contributing to a 32 per cent increase in global retail sales to 324,184 vehicles in the 11 months to 
November.

In the current calendar year, sales in the Middle East and North Africa have increased by more than 9 per cent to 11,418 units.

JLR chief executive Ralf Speth said: “We are committed to further international partnerships to meet record demand for our highly sought-after vehicles.

“The Kingdom of Saudi Arabia is an attractive potential development option, complementing our existing advanced facilities in Britain and recent manufacturing plans to expand in other countries, including India and China.”