Tata conglomerate chief Ratan Tata has said that “silly taxes” make manufacturing Jaguar and Land Rover impossible in India. The Jaguar and Land Rover local manufacture doesn’t seem to be happening in the near future due to the high taxes that the Indian government imposes on automobiles manufactured in India.
However, the completely knocked down(CKD) assembly of cars under the Jaguar and Land Rover will continue to be manufactured in India, where Tata Motors is using the Chikli plant to assemble the Jaguar XF Sedan and the Land Rover Freelander2 SUV through CKD kits which are imported into the country.
Tata motors, which owns Jaguar and Land Rover feels the market is not mature enough for local manufacturing of these premium and low volume luxury products as the cost involved in making these luxury cars will exceed that of the imported cars. So the British brand will soon start manufacturing in China and Saudi Arabia and not India despite Tata Motors being an Indian company.
Indian government imposes import taxes on imported cars through the completely built unit(CBU). But, the duties on the CKD kits imported into India are a fraction of what is charged for CBU imports. Thus, the luxury car makers have resorted to the CKD assembly route resulting in the employment of a large number of Indians, along with higher investment on assembly facilities.
Tata Motors hopes that in the future, the Indian government makes it more favorable for automakers to invest in production facilities within the country. When this happens, we can expect a huge surge in employment as well as investment in the country.
Also see – Jaguar Land Rover’s “40 new cars in 5 years”
Source – TimesofIndia
Image Credit – Telegraph.co.uk