Jaguar Land Rover Chief Wants Alliances, Not A Merger

Luxury automaker Jaguar Land Rover’s chief executive told Reuters he is open to more alliances to lower the costs of developing technology but is not looking for a full-blown corporate merger. “We feel the pressure” from demands to slash carbon emissions and develop electric vehicles, Jaguar Land Rover chief Ralf Speth said in an interview on the sidelines of the Los Angeles auto show.

But to the question of whether the company and its parent, Tata Motors Ltd. are seeking a merger for Jaguar Land Rover, Speth said: “The answer is no. We can really survive on our own.”

The British luxury sedan and SUV maker is “always open” to discussions of technology alliances and component sharing with other companies, Speth said. Earlier this year, the maker of Jaguar sedans and Land Rover SUVs agreed with German luxury automaker BMW AG to develop electric car parts jointly.

Jaguar Land Rover currently sells an electric Jaguar I-Pace sport utility vehicle and has said the next generation of its top-of-the-line XJ sedan will be all-electric. The company has not said when it will launch the new XJ.

“There’s no question in our mind that electric is the drive train of the future,” Eberhardt said. “But from a customer adoption point of view it takes longer than anticipated.”

Jaguar Land Rover has a product lineup, including hybrid, plug-in hybrid and battery electric vehicles, which could meet tighter European CO2 emissions limits which begin taking effect next year, but compliance will depend on the mix of vehicles customers buy, Speth said.

“In Europe, the mix (of vehicles) is encouraging, but not at the moment at the level we can say we are compliant right at the beginning,” he said. “But there is time to go. We are cautiously optimistic.”

A lack of public electric vehicle recharging infrastructure remains a challenge in selling electric vehicles in the U.S. and Europe, Eberhardt and Speth said.

Jaguar Land Rover was unprofitable through the first half of its fiscal year ended Sept. 30, hit by Brexit-related production shutdowns and weaker demand in China. But Speth said the second half of the year should be better than the first.

Demand in the Chinese market is volatile, though Jaguar Land Rover sales have seen “double-digit growth” in recent months, Speth said. But that growth has been from a low volume. Speth said he receives data on the Chinese market daily.

Speth and JLR North America chief Joe Eberhardt were at the Los Angeles Auto Show for the North American launch of the Land Rover Defender, a modern reincarnation of sport utility vehicles identified with African safari adventures and British country estates.