Jaguar Land Rover opens first wholly-owned plant outside UK in Brazil
Jaguar Land Rover has opened a new factory in Itatiaia, Brazil, to build the Range Rover Evoque and Discovery Sport for the local market amid challenging economic conditions.
Jaguar Land Rover has officially opened its new manufacturing plant in Itatiaia, Brazil, marking the company’s first wholly-owned factory outside the United Kingdom. The site, located near Rio de Janeiro, will produce the Range Rover Evoque and Discovery Sport for the Brazilian market.
JLR announced the Brazilian investment in 2013, targeting a growing market for premium SUVs. The company committed 750 million reais to the project. Since then, Brazil’s economy has faltered, with new-car sales falling sharply. Despite this, Jaguar Land Rover has pressed ahead, describing the opening as a key step in its global expansion strategy.
The plant’s maximum annual capacity is 24,000 vehicles, though the company expects to produce fewer than 10,000 units in its first year. Both the Range Rover Evoque and Discovery Sport will be assembled from kits, with a growing proportion of components sourced locally. Major suppliers include Benteler and IAC, providing items such as seats, cockpit assemblies, exhausts, chassis parts and powertrain sub-assemblies.
Localisation and supplier network
Jaguar Land Rover has invested in technical support for its Brazilian suppliers to help increase localisation over time. The company says this approach will help meet local content requirements and reduce exposure to currency fluctuations. JLR’s supplier base in Brazil is expected to expand as production ramps up, with the aim of building a more resilient supply chain for the region.
Land Rover already holds a strong position in Brazil’s mid-sized premium SUV segment, accounting for more than 30% of sales. Despite the wider market downturn, JLR reported an 11% rise in sales in Brazil over the first five months of 2016. The new plant is intended to support further growth and improve competitiveness by reducing import costs and lead times.
Context in JLR’s global strategy
Prior to Itatiaia, JLR’s only overseas production facility was a joint venture with Chery in China, opened in 2014. The Brazil factory is the first outside the UK to be wholly owned by the company. The move reflects a broader industry trend for premium manufacturers to localise production in key emerging markets, both to sidestep tariffs and to better serve local buyers.
