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From the Indian Times;

Tata Motors-owned British marquee Jaguar Land Rover is revving up to assemble two more models in India, which will increase its competitiveness in the fast-growing domestic luxury automotive market.

JLR is looking to roll out locally-assembled Jaguar XF sedan and Range Rover Evoque SUV within 12-18 months, a vendor familiar with the matter told ET. The company's India spokesperson declined to comment.

The new offerings will beef up JLR's presence in the segment where German rivals BMW, Mercedes and Audi hold sway. The company currently sells the SUV Freelander 2 assembled at its factory in Chikhale, Maharasthra while the rest of its portfolio comprises completely-built units or fully-imported vehicles.

Assembled cars attract a lower import duty of 10-30%, while imported vehicles are slapped a duty of more than 100%. JLR organised a meeting of vendors last week in Pune, the first time such a meet was held outside Britain, where 20 key vendors from India and 20-30 vendors from UK participated, along with the company's CKD head Mark Wallace, three vendors who were invited said. They added that Ian Harnett, JLR's director-purchasing said at this meet that the company will assemble more products and eye at least 20% market share in the next three years.

"JLR feels India and China will be the key growth drivers in the next five-10 years. Therefore, the company envisages a bigger assembly operation in India and joint venture partner in China to boost its overall growth," a key supplier said, requesting anonymity.

Experts say the Jaguar XF will take on the Mercedes Benz E Class, BMW 5 Series and Audi A6, while the Range Rover Evoque will compete with the BMW X3 in terms of price, though it is as compact as the BMW X1.

The domestic luxury car market, roughly defined as comprising vehicles priced at more than 20 lakh, is estimated to be growing at 35%-40% annually, ranking India among the fastest-growing markets in the world. It is expected to clock sales of 23,000 units this fiscal.

BMW, which overtook Mercedes Benz in 2009, dominates the segment, with Audi emerging as an aggressive third player. In 2010, BMW raced ahead with 6,246 units, while Mercedes Benz clocked sales of 5,819 units and Audi trailed with 3,003 units sold. JLR sold 891 units in 2010-11, but it aims to more than double the figure this fiscal. According to vendors, the company plans to ramp up its outlets tenfold to 100 over the next five years.

The MD and chief executive of Mercedes Benz, Peter Honegg recently named JLR as their biggest competitor in the long run. JLR will need to sell at least 3,000 units a year to break even, says Mahantesh Sabarad, auto analyst with Fortune Broking. "With the assembly of models in India, the pricing will come down and it will boost volumes. And larger the volumes, the better the profitability," he said. Though the 2 litre-2.2 litre engines fitted in the Evoque are ideal for Indian conditions, the company will have to overcome stiff competition from the German rivals to appeal to the typical Indian buyer who is aged over 40, he said.
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