Jaguar Land Rover this week starting building cars outside the UK for the first time, with Range Rover evoques rolling off a production line in China.
The first Range Rover Evoque built in China
The car market is now global, but it’s not a ‘free’ market; different countries impose different import tariffs and competing on a level playing field with imported vehicles is all but impossible when locally built cars have a far lower cost price.
In partnership with China’s Chery (western car makers must have a Chinese partner to get their foot in the door) Jaguar Land Rover’s new plant just outside Shanghai has started running this week with the first Range Rover Evoques rolling out and heading for Chinese buyers. And it won’t stop there.
JLR has already admitted it is currently planning at least one more Land Rover model (probably the new Discovery Sport) and a Jaguar model (probably the new Jaguar XE) will be built in China by 2016, allowing more competitive pricing by missing out on import tariffs of 25 per cent plus.
JLR sold more than 90,000 cars in China last year (although that was predominantly Land Rovers) and the expectation is that it can increase that number significantly – and start to get real market share for Jaguar – as the new plant churns out 130,000 cars a year.
JLR are adamant that production in China (and more production heading for Brazil, Saudi Arabia and the USA in the coming years) will not affect UK production. Which will certainly be the case of JLR can continue to increase sales year on year.
But who knows what will happen if the appeal of Range Rover, Land Rover and Jaguar starts to wane?
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