JLR mulls plant in Saudi Arabia

The Jaguar Land Rover luxury car unit of Tata Motors Ltd has signed a letter of intent with the Saudi Arabian government to study the feasibility of setting up a factory to build its models in the kingdom.

The unit was now commencing a detailed study for the plan, the company said in an e-mailed statement.

The initial investment has been estimated at 4.5 billion riyals ($1.2 billion), according to a separate statement by the National Industrial Clusters Development Program under the Saudi Arabian Ministry of Commerce & Industry. The statement added the factory would produce 50,000 Land Rovers a year by 2017.

''Saudi Arabia is an attractive potential development option,'' Ralf Speth, Jaguar Land Rover's chief executive officer, said in the company's statement. ''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.''

The luxury carmaker is now looking at emerging markets to offset slow demand in Europe.

The company said today it was expanding its assembly operations in India. In September it announced that it had received approval to form a venture with China's Chery Automobile Co to begin car manufacture in the world's biggest auto market.