Dismissible Notices Handler Error: The library can not be used because your version of PHP is too old. You need version 5.5 at least.
WP Review Me Error: The library can not be used because your version of PHP is too old. You need version 5.5 at least.
JLR ramps up capex spending to focus on new vehicles and technology: Ralf Speth – Viral News

JLR ramps up capex spending to focus on new vehicles and technology: Ralf Speth

IndiaTV-English News
World Environment Day: Ways to save the depleting environment
06/05/2018
Bollywood hails Sunil Chhetri and team for an epic win
06/05/2018

JLR ramps up capex spending to focus on new vehicles and technology: Ralf Speth


MUMBAI: Jaguar Land Rover expects its financials and the company to be stretched in the coming months as it ramps up capex spending to the highest ever in its history and prepares for new conventional models and a new wave of electrified vehicles.

Ralf Speth, managing director of JLR, told ET that the company’s ambitious plan to build new brands, new vehicles and technology for the future is aimed at reviving market share and spurring growth in the business.

“We have to again do everything, so many things in parallel. It is going to stretch the company and also its financials,” Speth told ET in an exclusive interaction recently.

Speth said JLR’s investment per unit, and the cost per unit will be high.

JLR to Invest £4.5 bn in FY19

“We don’t have economies of scale, we have investment which is higher; we can keep this ratio, at the end there is support from the Tata Group,” Speth said.

The comments came after Tata Motors, which owns JLR, posted a 50% fall in fourth quarter net profit hit by impairment charge on development programmes at the firm and JLR. The British brand also dragged down the consolidated margin of Tata Motors due to sluggish performance in developed markets.

JLR has reached a “certain scale”, said Speth, adding that there is always a step-up approach, “wherein we have to pre-invest to organise the next jump and this will stretch the organisation, stretch the financials”.

“We have 12,000 engineers in R&D, I don’t have any more chairs. We have to build another technical centre. We have to build new facilities and new labs,” he said.

In Slovakia, JLR is building a new plant, and its ambition to grow in electrification may need another $200-300 million for a new battery plant if volumes scale up.

“If you want to achieve the next step you have to pre-finance. We are exactly in that phase, where we have to prepare for the next leap,” Speth said.

JLR has earmarked an investment of £4.5 billion for FY19 and given the big disruptions in the connected, autonomous, shared and electric mobility platforms around the world, the figure may become the base line for future investment.

A significant part of this money will be spent on upgrading the conventional powertrain to meet new emission norms and also on expanding electrification across models in its portfolio. JLR says each of the Jaguar and Land Rover models will be launched with some form of electrification by 2020. It has also forecast that 20% of total sales will be from electrified vehicles by 2025.

The works in progress include redefining product portfolio, upgrading internal combustion engines, making a significant leap in autonomous and connected cars, and investments in shared mobility. “We have to make the investment as we have to catch up. It is a company with small volumes, investing exactly the same on electric vehicles versus our competitor who sells 1.5-2.5 million vehicles,” Speth said.

JLR sold 6,21,000 units in 2017 while Mercedes-Benz rolled out 2.3 million units, BMW 2.09 million and Audi 1.87 million. Tata Motors acquired JLR a decade ago. Since then, its revenue has grown five times to £25.78 billion, profits have swelled to £1.1 billion and volumes have more than tripled to 6,21,000 units.

“We are going to see more changes in the next five years than we have in the last 50 years. In such times, you have to play from the forefront of these changes or else you will fall back,” Speth said, explaining why the company is in investment mode.

“The automotive industry requires huge investments and it carries big risks as well,” he said.

“We have to invest in new plants, new models; it is always a 7-10 years cycle, until you see money coming back,” he added.





Source link

Leave a Reply

Your email address will not be published. Required fields are marked *