Jaguar Land Rover will spend about 4.5 billion pounds ($5.3 billion) in the current financial year on new models and technologies as the luxury carmaker looks to spur sales that grew at a slower pace.
“We will continue with over-proportional investment in new vehicles, manufacturing facilities and next generation automotive technologies in line with our autonomous, connected, electric and shared strategy,” Chief Executive Officer Ralf Speth said in a statement. The company spent 4.2 billion pounds in the year ended on March 31.
Deliveries at the luxury-car unit of Tata Motors Ltd. grew at 1.7 percent in the year through March, with demand for newer models such as the Jaguar E-Pace compact sport utility vehicle and Range Rover Velar failing to offset a sales drop in older models.
The investment push comes at a time when China has announced it will cut import duty on passenger cars to 15 percent from 25 percent, granting foreign carmakers further access to the world’s largest auto market.
While the Chinese market is providing sales traction for Jaguar Land Rover, growth has slowed over the past year, Debjit Maji, an analyst at Kolkata-based Stewart & Mackertich Wealth Management Ltd., said before the results.
“The recent announcement of reduction of auto import duty from the Chinese government is likely to augur well for JLR as it will bring down the prices of their products and make them more competitive, but it is true for its peers also.”
Tata Motors net income fell 51 percent to $311 million in the three months ended in March, a steeper decline than analyst estimates. Profit before tax at Jaguar Land Rover dropped 46 percent to 364 million pounds in the period.