Meeting Demand: Jaguar and Land Rover Need More Engines from Ford to Keep Up

A positive sign of economic recovery is a return to demand and profitability. For Jaguar and Land Rover, which have both exceeded their production estimates, this also means a shortage of engines, prompting parent company Tata to ask Ford for more.

“We could produce more if we have engines,” Tata CEO Carl-Peter Forster said.

Because both brands’ portfolios include models developed while they were under Ford’s wing, they still rely on Ford for engine production. According to a report by Bloomberg, JLR sales were up 59 percent over the last quarter, and new owner Tata has been struggling to keep pace. Combined, the two brands sold 57,153 units — a 20,000-unit year-over-year increase.

An agreement between Ford and Tata, following the sale of the British luxury marques in 2008, allows the Indian automaker to purchase engines until 2019. Since the sale, Jaguar and Land Rover have moved into the black, and plan to develop hybrid models as early as 2014, thanks to a loan. JLR also has plans to develop completely new architecture in the short term.

Today, we learned that Land Rover will begin producing its SUVs in India next year, in order to keep costs down and production up.

The success of JLR in the recovering economy is but one of several manufacturers’ return to sales and profitability.

Will Tata be able to sustain the momentum? Will Ford be able to supply enough engines? Let us know what you think in the comments section.

Source: Bloomberg

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