The two companies will now begin a detailed feasibility study

Jaguar Land Rover (JLR), a part of Tata Motors, is exploring the viability of setting up an automotive facility in Saudi Arabia.

JLR and Saudi Arabia’s National Industrial Clusters Development Program (NICDP) signed a letter of intent on Tuesday , paving the way for an automotive partnership in the Kingdom of Saudi Arabia, a statement from JLR said. The statement also said that the two companies would now begin a detailed feasibility study. The exploratory discussions follow JLR’s recent joint venture announcement with Chery Automobile Company to make vehicles at a new plant near Shanghai, China, and a separate expansion of the JLR assembly at the company’s Pune plant.

The expansion follows a sharp rise in JLR sales to emerging markets, which contributed to a 32 per cent increase in global retail sales to 324,184 vehicles in the eleven month period ended November 30, 2012. Sales in the Middle East and North Africa grew more than 9 per cent to 11,418 units, the statement said. The discussions between JLR and the Saudi government are at a preliminary stage, although opportunities have already been identified in aluminium component production, where JLR has established a leadership position. The world’s largest integrated aluminium complex, a joint venture between the Saudi Arabian Mining Company and Alcoa of the U.S., is to begin production in 2014 at the Ras Al Khair facility – creating potential opportunities for the automotive sector, JLR said.

“We are committed to further international partnerships to meet record demand for our highly sought after vehicles. Saudi Arabia is an attractive potential develop- ment option, complementing our existing advanced facilities in Britain and recent manufacturing plans to expand in other countries including India and China,” said Ralf Speth, CEO, JLR.

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