Jaguar Land Rover Expects 50 Pct Drop in China Growth This Year

on October 21 2014 | in Auto | by | with No Comments

Range Rover Evoque

Jaguar Land Rover expects its sales growth in China to drop by 50 percent this year after robust growth.

Despite opening its first overseas factory in China on Tuesday, which saw JLR’s first made-in-China vehicle, the Range Rover Evoque, roll off the assembly line, Jaguar expects sales to be up 20 percent this year, down from last year’s 40 percent. Sky-high growth rates are not sustainable due to larger base of comparison.

JLR’s head of Greater China told Reuters at the factory opening, “The market is a little bit slower in the second half compared with the first half.” He added, “As our volume in absolute terms gets bigger and bigger, it becomes harder to keep doing the double-digit growth. I would expect next year to slow a little bit in comparison to this year. We’ll still see reasonable growth but it won’t be the stellar growth we’ve seen in recent years.”

With the Chinese government’s anti-corruption crackdown and its antitrust investigation into the pricing of goods by foreign automakers and other firms, the Chinese auto industry is in a state of transition. In September, China’s auto industry grew at the slowest rate in 19 months.

Nonetheless, Jaguar Land Rover sees its new plant in Changshu, two hours outside Shanghai, giving it a leg up on the competition. Scheduled to be ready for full production in 2016, the new Chinese factory means the cars produced there will be exempt from import taxes. Along with the Evoque, JLR plans to create two more models locally by 2016 as well as new models and derivatives specifically designed for the Chinese market in the future.

The factory, which is jointly owned by the British Automaker and Chinese joint-venture partner Chery Automobile Co. Ltd., has an annual production capacity of 130,000 vehicles. JLR and Chery have committed to investing 10.9 billion yuan ($1.78 billion) in the plant.

image credit: flickr/land rover mena

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