China bails out JLR with £600-million order

28 February 2009

The British luxury car maker, Jaguar Land Rover owned by Tata Motors has been bailed out, not by the UK government, but by China as a Chinese trade delegation to Europe signed a life-saving deal worth £600 million to purchase13,000 vehicles from JLR over the next three years.

Cash-strapped JLR, bought out by Tata Motors in 2008 from Ford before the onset of the rapid eceonomic slowdown, will supply 10,000 Land Rovers' Freelander 2 4x4s and 3,000 Jaguars including the Jaguar X-Type cars and over a three-year period.

The important deal comes at a time when the entire UK car industry, especially luxury car maker JLR has been lowering production and introducing redundancies in response to the sharp decline in car sales due to the drying up of bank loans.

The importance of the Chinese order was spelt out by Jaguar, which said that it was "a very significant" order that comes at "this challenging time."

The news has lifted the sagging morale of the employees at the company, which employs thousands of workers in the UK. It could lso affect a vote on a proposal aimed at no job cuts for two years in exchange for one-year pay freeze, increased pension contributions and a four-day week.

A significant number of these 13,000 vehicles will be sold by dealers to individual Chinese buyers. From no sales in the country, the UK company in the recent past has been making steady inroads into the Chinese market, which has now become JLR's fifth biggest in three years.