Jaguar Land Rover sorts its finance

Jaguar Land Rover owners Tata have been waiting for Lord Many and his minions to stump up a loan guarantee to help the company move forward all year. But there seem to have been some pretty big obstacles in the way. Initially the Government wanted to impose a board member on JLR – which Tata wouldn’t stand for – and later that seems to have been changed to a Government veto over any JLR plans. Which was equally unacceptable to JLR.

But it is now being reported that JLR has managed to secure £175 million in private funding, obviating the need to succumb to Government interference in its business. Which has got to be good news for the JLR workforce – at least for now.

Jaguar and Land Rover are very much on the up. The new Jaguar XJ looks set to take on the offerings from Germany in a big way, much as the Jaguar XFR has shown BMW and Mercedes how to make a super-saloon. The new Range Rover is selling above expectations, and the mini Land Rover – the Land Rover LRX – is a work in progress.

But, much as this all augers well for Tata and JLR, will JLR production remain centred on the UK? To us it seems unlikely. India – home of parent company Tata – is a rapidly rising – and tax and cost-efficient – place to build cars. So it makes perfect sense to set up manufacturing for JLR in India to service both India and other rising markets. It may be that JLR will continue to build in the UK for the foreseeable future – if only to retain the ‘Englishness’ of their products – but long-term their manufacturing future is surely in India.

But in an increasingly global economy we must accept that this is inevitable. JLR and Tata are a business and exist to make a profit. They need to be free to make the decisions that are right for their business. This new funding will make that easier.