Jaguar Land Rover’s Saudi Arabia plans move closer

Jaguar Land Rover has signed a letter of intent with the government of Saudi Arabia to build and operate a production facility in the Kingdom.

When we reported in September that Jaguar Land Rover were contemplating building a production plant next to a new  aluminium smelting plant in Saudi Arabia, we thought it was a way off. But it’s not as far away as we thought.

Jaguar Land Rover has now signed a letter of intent with the National Industrial Clusters Development Program (NICDP) in Saudi Arabia to plan an automotive facility in Saudi.

Nothing is cast in stone yet, but the sense of setting up shop in Saudi Arabia next to a new aluminium plant at Ras Al Khair, which opens in 2014, is very compelling. JLR’s cars rely heavily on aluminium, and a new plant next to the world’s biggest aluminium production facility – which will benefit from stable product and energy prices – is a very sensible move.

What also makes sense is JLR’s commitment to diversifying its production facilities. It would be foolhardy to rely on production just in the UK when your product is a global one, and adding Saudi to the list of production sites for JLR’s cars – with China coming on stream soon and India not far behind – insulates Jaguar from potential economic woes at home.

But what diversifying production locations also does is produce jobs at home. Jaguar and Land Rover need to be seen as quintessentially British to succeed so, as Jaguar Land Rover told us more than three years ago, a prospering and growing JLR in the UK is key to its future.

This news may come on the same day as Jaguar announced it is axing the C-X75 supercar, but it illustrates that JLR are far more focused on its long-term prosperity than a halo vanity project.

Which must auger well for the future of JLR, both at home and abroad.