Tata Motors is planning a joint venture with British luxury vehicle unit Jaguar Land Rover to develop a premium SUV for sale in India.
Economic Times of India said Tata was close to finalising a joint project to develop a model that could be priced at INR2m-INR2.5m (US$33,000-$42,000) and compete with models like the Toyota Fortuner, Ford Endeavour and Hyundai Santa Fe.
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A team of 45 engineers headed by Karl Heinz Servos is working on the project, codenamed Q5, which could lead to rolling out of a five/seven seat SUV in 2016-17, people familiar with the matter told ET.
The development comes six years after Tata Motors acquired Jaguar and Land Rover from Ford.
ET said, if a business case is made, the SUV would be built on the Freelander 2 platform though it would be substantially modified to suit Indian conditions.
“The SUV is likely to be 50-85% different from the existing Freelander but it will have the genes of a Land Rover with JLR quality,” an executive with knowledge of the development said.
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By GlobalDataA senior Tata Motors executive told ET the company was close to concluding the project study.
“We are exploring new options with JLR, one of them being the Q5 and the other is a common engine option. There is a continuous dialogue with JLR on processes and engineering inputs for our existing products,” said the unnamed executive.
The Economic Times said the project was initiated by Carl Peter Forster, former CEO of Tata Motors, and carried forward by Tim Leverton and the late Karl Slym.
Tata Motors caters to the mass market while JLR pitches its products at the luxury end of the automobile market, making convergence between the two companies particularly difficult.
Executives told ET Tata Motors would gain from JLR’s engineering and development skills while JLR could benefit from common sourcing of parts for the Q5 and its other products in future.
“We don’t comment on future products and plans,” Tata’s spokesperson said.
JLR India did not respond to requests for comment.
ET added the SUV was likely to be badged as a Tata product although a joint badging option was also being explored since Tata Motors’ foray into the premium market with its crossover Aria priced at over INR1m ($16,700) found very few takers.
Experts said Tata Motors would need an image makeover to succeed with a premium SUV.
“It is a huge challenge for Tata Motors since they can’t change brand positioning that quickly,” Mohit Arora, executive director, JD Power Asia Pacific, told ET, adding that Tata is associated with affordable with affordable and fuel-efficient vehicles.
