From the current 13 product lines the two luxury brands will have 16 products by 2024.
Jaguar Land Rover is investing more than £20 billion (Rs 1.8 lakh crore) over the next five years to build its future pipeline of products that includes three new models, 100 upgrades and a fully flexible vehicle platform.
The two British brands owned by Tata Motors gave margins guidance until 2024 in an investor meet in London organised on Friday. Tata Sons Chairman N Chandrasekaran, Tata Motors Group CFO P Balaji and JLR CEO Ralf Speth were among the nine executives that attend the meet.
As per the plan from the current 13 product lines – seven models of Jaguar and six of Land Rover – JLR will progressively have 16 products by 2024 including the Jaguar i-Pace and the new Land Rover Defender. Additionally, the auto major will have 100 product actions during the same period.
The two brands are also making strides in green fuel technology such as mild hybrid, plug-in hybrid and battery electric vehicles. Investments will be made to develop a new platform called Modular Longitudinal Architecture (MLA).
This new platform will be ready by 2025 at which point every JLR product will be able to cater for a conventional petrol/diesel powered vehicle, hybrid or fully electric option. The company has already declared that by 2020 every new product will be electrified.
In the near term JLR expects about five percent of its global sales to come from a mix of fully electric and hybrid vehicles which will grow to about 20 percent in the medium term. Share of petrol-powered cars (including mild hybrid cars) are expected to come down to 50 percent in the medium term from 60 percent expected in the near term, and diesel-powered vehicles (including mild hybrid cars) to 30 percent from 35 percent.
Softening of demand and decline in preference for diesel cars in Europe and UK led to stifling growth in retail sales last year of just 1.7 percent 614,309 units as compared to 604,009 units clocked in 2016-17. In 2015-16 the two brands had recorded a growth of nearly 16 percent.
A new plant in Slovakia will start operations in September 2018 with a Phase 1 capacity of 150,000 units per annum. The plant will start manufacturing Discovery before adding future products to its line. This plant is the ninth for JLR globally as the car maker has four plants in the UK and one each in China, India, Brazil and Austria.
Both brands have however moderated volume growth plans in the near term which will reflect in earnings before interest and taxation (EBIT) margins. From 3.8 percent EBIT margin recorded in FY18, JLR has given a guidance of 4-7 percent and 7-9 percent in the medium and long term period, respectively.
“Investment to be Pound 4.5 billion per annum between FY19-21 and subsequently targeted at about 12-13 percent of turnover thereafter”, the two brands said in a presentation.