Engine Shortage Clips Jaguar Land Rover

Tata Motors Jaguar Land Rover company faces a problem that many car makers would

prefer to confront over lagging sales shortage of parts to meet increasing product demand. In this case, Jaguar Land Rover now has to look for alternate engine sources to meet the growing UK market demand for its luxury cars that has exceeded their projections.

Carl-Peter Forster, the former boss of General Motors Europe and now chief executive of Indias Tata Motors, owner of the two luxury car marques revealed in a press conference yesterday that "there are engine supply constraints right now because demand has exceeded our expectations and that the company was exploring "de-bottlenecking measures" while talking to suppliers to increase production.

Engines for the luxury brands jaguar and Land Rover come from Ford Motors, the previous owner of the two brands before Tata took over to the tune of 1.6 billion ($2.5 billion).

Mr. Forster has unveiled spectacular quarterly sales performances for JLR which registered a 60% increase in sales to 57,153 units for the 2nd quarter of the year compared to the same period last year. This has erased companys losses in the fiscal year of 2009 to post a pre-tax profit of 233.6 million. The new Jaguar XJ model boosted its sales and the Land Rover performance in March saw its best ever sales in the UK for the marques 62 year history.

JLR sales in China reached 104% increase over last year and the company is looking at bringing its automotive production into the country as part of its overall cost containment efforts that started with local production in India for its local markets.

Compared to an overall loss of 3.29 billion Rupees in the three months ending in June, 2009, Tata Motors goes out of the red into the black with 19.9 billion Rupees in profits for the same period this year.

Car Sales Booming in the UK, including Luxury cars

Despite the economic uncertainties triggered by the continents sovereign debt crisis and the remnants of the global economic recession, sales of luxury cars in the UK have been booming over the last few months.

Industry observers, including UKs largest car dealership group, now hail the governments scrappage program as making an effective incentive for locals to purchase new cars in exchange for 10-year old cars.

Under the scrappage scheme that started a year ago, car owners can trade-in their 10-year old cars or older for new ones and enjoy a discount. First criticized as being toothless in the face of a deepening recession, the governments scheme, affectionately called cash for clunkers eventually became the darling among car dealers from boosting sales of new car inventories.

Owners can participate in the program if they had used their 10-year old cars in no less than 12 months and the subsidy is shared between the government and the automotive industry with the government capping its share at 300 million. That means the program is only good for 300,000 new car purchases. The program has ended in February 2010 and demands that it be extended are on the roll.

by: Simon Drew

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