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Jaguar looks for Saudi Arabia partnership

Posted on Dec 11, 05:34PM | IBNS

Automobile giant Jaguar Land Rover on Tuesday signed a Letter of Intent with the Saudi Arabian government for an automotive partnership in the country.

Azzam Yaser Shalabi, President of the National Industrial Clusters Development Program (NICDP) Saudi Arabia, and Dr Ralf Speth, Jaguar Land Rover Chief Executive Officer, formally signed the Letter of Intent paving the way for an automotive partnership in the Kingdom of Saudi Arabia.

Jaguar Land Rover, the UK's leading manufacturer of premium vehicles, and Saudi Arabia's National Industrial Clusters Development Program (NICDP) will now begin a detailed feasibility study together, to determine the viability of setting up an automotive facility.

"HRH Prince Faisal Bin Turki bin Abdul Azi Al Saud and the Saudi Arabian Government has expressed its intention to initiate, develop and support the automotive industries and see Jaguar Land Rover as a potential partner to help strengthen their industrialisation plans," said an official release.

Speth said: "The Kingdom of Saudi Arabia is an attractive potential development option, complementing our existing advanced facilities in Britain and recent manufacturing plans to expand in other countries including India and China."

Discussions between Jaguar Land Rover and the Saudi Government are at a preliminary stage, although opportunities have already been identified in aluminium component production - an area where Jaguar Land Rover has established a leadership position, said the company.

The world's largest integrated aluminium complex, a joint venture between Saudi Arabian Mining Company and Alcoa of the US, is due to begin production in 2014 at the Ras Al Khair facility - creating potential opportunities for the automotive sector.

Exploratory discussions about potential investment in Saudi Arabia follows Jaguar Land Rover's recent joint venture announcement with Chery Automobile Company Ltd to manufacture vehicles at a new plant near Shanghai, China, and the separate expansion of the Jaguar Land Rover assembly at the company's plant in Pune.

Such expansion follows a sharp rise in Jaguar Land Rover sales to emerging markets, contributing to a 32pc increase in global retail sales to 324,184 vehicles in the eleven months to November 30, 2012.

In the current calendar year, sales in the Middle East and North Africa have increased by more than 9pc to 11,418 units.

Pending agreement on development options in the Kingdom of Saudi Arabia, Jaguar Land Rover would expect to announce further plans in 2013. Issues such as level of investment, potential capacity and job creation have not yet been discussed in detail between the parties.

"This is an exciting project that could enable Jaguar Land Rover to establish a Joint Venture partnership in a part of the world where luxury vehicle sales are expected to rise," said Speth. "If we proceed, it will complement our existing expansion in the UK and elsewhere."