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Tata to develop Jag-Rover engines

Published:Sunday | August 15, 2010 | 12:00 AM

MUMBAI, India (AP):


Indian engineering will play a role in the design of new Jaguar Land Rover engines, Tata Motors Chief Executive Carl-Peter Forster said Thursday, a long-term threat to Ford Motor Co which is now under contract to supply JLR engines.

Tata Motors bought Jaguar Land Rover from Ford in 2008 for US$2.3 billion. As part of that transaction, Tata Motors entered into a series of contracts to buy vehicle components and technology from Ford.

Forster said those contracts begin to expire around 2015. He said he intends to renew them but would like to engineer new Jaguar Land Rover engines in-house, combining the expertise of the group's engineers in India and the UK.

Ford declined to comment.

"In this segment, image is very important," said Deepesh Rathore, chief auto analyst at IHS Global Insight in New Delhi. "You can't keep running your cars with Ford engines. You need to have your own engine."

A few hundred million

He said the contracts were probably worth a few hundred million dollars to Ford.

"Business-wise, it's definitely a loss, but I think it's something Ford would have always been prepared for," he said.

The move comes as Tata works to integrate its UK operations with its low-cost India base.

Forster said Indian engineers will help out with the redesign of the Defender jeep, which is something of a British icon.

"We are determined to come up with a modern-day Defender," Forster said. "Our team here in India has a lot of expertise with off-road and 4x4 vehicles for developing markets. This is not to say the next generation Defender will be engineered in India, but we are one company and we should leverage our capabilities."