Car giant mulls Saudi car assembly plant

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(Bloomberg)

(Bloomberg)

The construction of the world’s largest aluminum smelter in Saudi Arabia has prompted Jaguar Land Rover to explore the possibility of setting up assembly operations in the Gulf kingdom.

The move would tie in with Jaguar Land Rover’s focus on increasing aluminum content in its cars, parent company Tata Motors said.

In an interview with Autocar India, Tata Motors’ chairman Ratan Tata said: “This smelter could make the production of aluminum in Saudi Arabia very competitive.

"So taking a really long-term view, if we put an assembly plant there with a large press shop, given our commitment to aluminum in our products, we could have an interesting business case which we are examining today.”

The joint venture project between Saudi Arabian Mining company and Alcoa is slated to begin production in 2013 and is expected to be the cheapest and most efficient aluminum producer in the world, the magazine added.

It said the next generation Range Rover, set to debut at the Paris Motor Show later this month, is an example of the growing use of aluminum in JLR’s vehicles.

The car maker says the direct benefits of the increased aluminum content will be seen in fuel economy, emissions, performance and agility of the new models.

Saudi Arabia, which is part of JLR’s Middle East and North Africa (MENA) business region, contributed sales of 1,289 units in 2011-12.

The MENA region is Land Rover’s sixth largest market, and the fifth largest for Jaguar globally.

During the current fiscal year, cumulative sales of Jaguar Land Rover have grown by 36 percent to 110,373 units, Autocar India said.

Saudi Arabia has its own plans to manufacture car parts by 2013 and to build two car models and assemble cars in about 10 years, an official who is handling the development of country’s automotive industry said last year.

The kingdom, the world’s largest oil exporter, is trying to develop new conversion industries in areas around refineries and petrochemical plants that are being built by Saudi Arabian Oil Co and Saudi Basic Industries Corp.

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