Jaguar Land Rover Could Reach One Million Annual Sales
Tata Motors' Jaguar Land Rover division forms more than 95% of the company's valuation by our estimates. Retail sales for the British premium vehicles manufacturer stood at just over 425,000 units in 2013, up 18.8% year over year, and more than double the sales figure in 2009, JLR's first full year under Tata Motors. In view of the large scale investments by the company on capacity expansions and development of new products, as well as the rising demand for luxury vehicles worldwide, we estimate Jaguar Land Rover to reach the one million annual unit sales mark by the end of the decade. As demand for the high performance vehicles made by Jaguar Land Rover grows around the world, the brand will for the first time expand production outside the domestic market with manufacturing beginning in China this year. In addition, the automaker will also build a manufacturing plant in Brazil this year, and could roll out its first locally produced vehicle in the country by 2016.
Extending production capacities in China and Brazil reflect Jaguar Land Rover's aim to gain from the growing luxury vehicle demand in emerging economies, as well as the cost effectiveness associated with local production and raw material sourcing. In particular, China will remain crucial for the brand to achieve one million unit sales "Anadrol 50" by 2020. and some European markets, and is expected to continue growing due to increasing disposable incomes and strong consumer preference for higher priced luxury brands.
While China constituted only 8% of Jaguar Land Rover's net volumes in fiscal year 2010 ended March, the country is now the single largest market for the luxury vehicle brand, forming 24% of the net unit sales last fiscal. China has been a strong sales market due to low current luxury ownership rates, rising proportion of affluent individuals, and their strong affinity for premium brands. The country is expected to become the largest premium automotive market in the next couple of years, and sell over 3 million luxury vehicles annually by 2020, almost double the volumes presently. and Russia.
JLR Trails The Germans But Leads The Japanese Automakers In China
The German luxury brands 's Audi, BMW, and 's Mercedes Benz together form a massive 73% of the Chinese premium vehicle market at present, by our estimates. Jaguar Land Rover ranks fourth behind these three companies in China, but the British carmaker is a distant fourth. In fact, Audi sold more vehicles in China alone last year (491,989 units) than Jaguar Land Rover sold worldwide. However, JLR holds the edge over the Japanese makers 's Cadillac in the country. While Cadillac sold 33,760 units in China through May, an impressive 72% year Injectable Steroids For Bodybuilding In India over year improvement, Jaguar Land Rover sold over 50,000 units in the country during the same period. The British brand also sells more vehicles than sold by both Lexus and Infiniti combined in China.
Automakers "Achat Anabolisant Belgique" Ramp Up Production And Dealership Network In China
Why Audi, BMW, "Anaboliset Aineet" and Mercedes have been able to grab more than a substantial share in China's luxury vehicle market is partly due to local manufacturing of some of the highest selling models, and "Anaboliset Aineet" expansive dealership networks Injectable Steroids For Allergic Reaction within the country. While each of these German companies has over 300 dealerships in China, Jaguar Land Rover had 170 sales outlets in the country as of March. JLR imports its vehicles into China, and is subjected to the country's 25% import taxes, in addition to the value added tax and consumption tax, making the already high priced vehicles more expensive. Lexus, Infiniti, and Masterton Rentals Cadillac also import vehicles into China, thereby somewhat relinquishing price competitiveness. But while Lexus has no immediate plans of local production in order to protect quality, both Infiniti and Cadillac are expanding manufacturing in China this year, in a bid to draw further growth from the country.
In order to catch up to the German automakers and fend off competition from other carmakers in China, Jaguar Land Rover is also stepping up investment in the country. Tata Motors was previously present in China as a Wholly Foreign Owned Enterprise, but entered into a joint venture with the Chery Automobile "buy cheap jintropin online" Company in October 2012, as part of a 10.9 billion RMB investment, to assemble units as well as manufacture China specific models. Production of the first Land Rover sports utility vehicle built under this partnership is set to begin by the end of this year, and the plant will have an initial annual production capacity of around 130,000 vehicles by next year. Seeing how JLR has sold 111,218 units in China in the twelve months ended May, this manufacturing facility should be able to feed a large portion of the local demand going forward. Jaguar Land Rover's vehicle prices are expected to fall by 15% on account of local production, which will reduce import tariffs and transportation costs. Relatively lower vehicle prices should boost demand for JLR in China.
JLR Also Bids To Compete In China's Compact Luxury Segment
Although Jaguar Land Rover's prices might drop by 15% or more due to local production, the brand will still be operating at much higher average revenue per vehicle as compared to the German automakers. This is because JLR competes in the higher end of the luxury vehicle segment, with average revenue per vehicle of over $70,000 by our estimates. In comparison, average vehicle prices for Audi and Mercedes are around $45,000 and $55,000 respectively. Selling only higher priced medium and large premium sedans and SUVs limits the consumer base and is one of the reasons why JLR trails Audi, BMW, and Mercedes in China.
However, Jaguar is set to introduce its compact sedan XE, based on the new lightweight aluminium monocoque, in early 2015. The model could also make its way into the compact luxury vehicle market in China soon after launching. In addition to the XE, Jaguar also plans to launch its crossover codenamed C X17, also built on the same aluminium architecture. Late last year, the China exclusive five seater version of the Jaguar C X17 concept car made its debut in Hong Kong, to celebrate the opening of a flagship showroom in the region. Both the XE and C X17 will compete in the rapidly growing compact luxury segment in China's auto market, which is expected to form 20% of all luxury vehicle sales in 2015, up from around 11% in 2012.
Jaguar Land Rover presently holds around 6.5% share in China's luxury vehicle industry. If JLR improves its share to only 8% by the end of the decade, and given the estimate of 3 million premium vehicles sold in China by then, volume sales for the British manufacturer could reach 240,000 units in the country by 2020. This represents 24% of the anticipated one million unit sales for JLR by 2020, which is also the proportion of China sales at present. But we expect growth in China volumes to outpace that in other countries through the end of the decade, on the back of high luxury vehicle demand, local production, and expansion into the fast growing compact segment. The company might improve its market share in China to 10 11%, especially gaining ground on automakers such as Lexus that aren't adding local manufacturing facilities. 11% market share would mean that China will contribute about one third to the net volumes for Jaguar Land Rover by the end of the decade.