Jaguar and Land Rover, the UK based carmakers, are to set up dealership networks in India soon as they seek to use ties with Tata Motors, their new owner, to find new markets.
India's largest automotive company is encouraging the luxury carmakers to explore its domestic market following the success of Land Rover in emerging economies such as China and Russia.
Ravi Kant, Tata Motors managing director, said: "Our sales and marketing department has helped facilitate a visit by the senior people (from Jaguar and Land Rover). They have come, they have seen and they are putting some plan in action."
The moves come as Tata Motors faces increasing criticism over its $2.3bn takeover of the two luxury marques, which analysts say do not fit with its stable of lower-cost trucks, commercial vehicles and cars.
The acquisition is also looking ill-timed. Tata Motors is struggling to refinance a $3bn bridge loan used for the takeover, leading to successive downgrades by credit ratings agencies.
Analysts say the collapse in Tata Motors' domestic market is also a concern. Truck and car sales have fallen by up to 50 per cent in recent months, forcing Tata and its rivals to suspend production at various plants.
Mr Kant said Jaguar and Land Rover managements remained autonomous but he felt they should pursue the India opportunity quickly to help make up the deficit in western markets.
Jaguar, which has recently released popular new models, has been selling relatively well in spite of the crisis but Land Rover sales have been hit badly.
Mr Kant suggested Tata Motors also facilitate other opportunities for its new subsidiary, particularly Land Rover, in areas such as defence. Tata Motors is already a significant supplier to India's defence industry.
However, he said that while Tata Motors faced cyclical pressures similar to other producers, it was on track to bounce back. The group was spending $4bn-$5bn to revamp its product range, a move he said was essential to revive sales.
The group had built a new factory for its light commercial vehicle, the Ace, in northern Uttarakhand state with capacity of 250,000 units a year. It is building a factory for the world's cheapest passenger car, the Nano, in Gujarat state, also with capacity of 250,000. A bus plant and a joint venture plant with Fiat to produce 100,000 cars and 200,000 powertrains were also under construction.
Copyright The Financial Times Limited 2008
