Tatas ready with Merc, BMW rival

Move aimed at entering the volume generating premium car segment

A rival to compete with Mercedes C Class and BMW 3 Series will be launched by Tata Motors-owned Jaguar towards the end of this year, marking the luxury brand’s entry into the high-volume premium car segment. Sporting a compact four-cylinder, two-litre engine, this new sedan will be the smallest five-seater luxury saloon under the Jaguar brand.

In addition to competing with the Mercedes-Benz C Class and BMW 3 series, the new Jaguar car will also compete with the Audi A4. Though company officials remain tight-lipped, the new car is likely to be priced at between Rs 40 lakh and Rs 45 lakh. Jaguar Land Rover is targeting a commercial launch of the ‘baby Jaguar’ closer to the end of the year.

A global launch will follow the launch in the Indian market.

In a conference call with financial analysts, Tata Motors Chief Financial Officer C Ramakrishnan said: “We are launching under the Jaguar brand a vehicle that’s equivalent to the Mercedes C class and BMW 3 series. It will be out towards the end of this calendar year.”

 

This new sedan will be powered by a small engine developed jointly by JLR and Tata Motors. It will be made at a new engine plant in the UK, which will come on stream by the end of the calendar year. 

 

Official estimates put the market of such entry luxury cars at around 7500-8000 units a year. Of this Mercedes-Benz has a share of little more than 30% with the C Class which is priced at Rs 3,935,000 (Ex-showroom, Delhi).

 

Tata Motors will likely extend the manufacturing of this new smaller Jaguar to India and China to keep its price competitive. At present the company makes the XF sedan from its Chikhli-based facility near Pune. 

 

A completely knocked down operation will cost 30% import duty as against more than 150% duty charged on fully imported models. Soon the Mercedes-Benz S Class rivaling Jaguar XJ will also be assembled in India, according to sources. 

 

Jaguar sells four models in India as of today. Its last launch in India was the F Type, an open-top (convertible) sport car priced at around Rs 1.5 crore. Its fourth model is the XK sedan brought to India as a fully imported model.    

 

Though Jaguar is launching a entry level model Tata Motors intends to stay clear of the low-end of the luxury market where a couple of models of Mercedes-Benz has become hot sellers.

 

The German company launched, about 15 months ago launched  in India, the B Class followed by the A Class, both of which are priced under Rs 2,500,000. Collectively both the models are contributing more than 30% of the Mercedes’ total monthly sales.

 

Ramakrishnan clarified that the company has no plans of entering mass or volume segments such as those addressed by Mercedes-Benz, BMW (with the 1 Series) and the soon-to-be launched Audi A3. 

 

“Both Jaguar and Range Rover vehicles will maintain their product appeal and the brand and the value they stand for. Then we are not getting in to massive volume segments or lower level segments”, added Ramakrishnan.

 

Since the beginning of this financial year Jaguar, which was struggling even as Land Rover sales kept rising, has been on a roll. Sales of the XF sedan, which constitutes 60% of the total Jaguar sales, rose 33% until January to 37871 units. 

 

Jaguar sales climbed 44% during the 10 months to close at 63,491 units as against 44,175 units sold in the same period last year. China bought more than one-fourth of total Jaguars made this year, emerging as its biggest market followed by North America.