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Sixty-Seventh Annual Report 2011-2012
emissions. In many markets these preferences are driven by
increased government regulation and rising fuel prices. The
Company’s operations may be significantly impacted if there
is a delay in developing fuel efficient products that reflect
changing customer preferences, especially in the premium
automotive category. The Company endeavors to take account
of climate protection and the ever more stringent laws and
regulations that have been and are likely to be adopted. The
Company focuses on researching, developing and producing
new drive technologies, such as hybrid engines and electric
cars. The Company is also investing in development programs
to reduce fuel consumption through the use of lightweight
materials, reducing parasitic losses through the driveline and
improvements in aerodynamics.
In addition, the climate debate and promotion of new
technologies are increasingly resulting in the automotive
industry’s customers no longer looking for products only on
the basis of the current standard factors, such as price, design,
performance, brand image or comfort / features, but also on
the basis of the technology used in the vehicle or the
manufacturer or provider of this technology. This could lead to
shifts in demand and the value added parameters in the
automotive industry.
One of the Company’s principal goals is to enhance its status as
a leading manufacturer of premium passenger vehicles by
investing in products, R&D, quality improvement and quality
control. The Company’s strategy is to maintain and improve its
competitive position by developing technologically advanced
vehicles. Over the years, the Company has enhanced its
technological strengths through extensive in-house R&D
activities, particularly through the Company’s advanced
engineering and design centers. These centralise the Company’s
capabilities in product design and engineering. Further, the
Company is pursuing various qual ity improvement
programmes, both internally and its suppliers’ operations, in
an effort to enhance customer satisfaction and reduce future
warranty costs.
considering the vehicle sales in the US, Europe and China. In
addition, Jaguar Land Rover source a significant portion of
input material from European suppliers.
Although the Company engages in currency hedging in order
to decrease its foreign exchange exposure, a weakening of
the Indian Rupee against the US dollar or other major foreign
currencies may have an adverse effect on the cost of borrowing
and consequently may increase the financing costs, which
could have a significant adverse impact on the Company’s
results of operations.
The Company also has interest-bearing assets (including cash
balances) and interest-bearing liabilities, which earn interest
at variable rates. The Company is therefore exposed to changes
in interest rates in the various markets in which it borrows.
New products, emissions and technology-
Intensifying
competition, reducing product life cycles and breadth of the
product portfolio, necessitates the Company to continuously
invest in new products, upgrades and capacity enhancement
programme. Though the Company employs sophisticated
techniques and processes to forecast the demand of new
products yet the same is subject to margin of error.
Further the competitors can gain significant advantages if they
are able to offer products satisfying customer needs earlier
than the Company able is to and this could adversely impact
the Company’s sales and results of operations. Unanticipated
delays or cost overruns in implementing new product
launches, expansion plans or capacity enhancements could
adversely impact the Company’s results of operations. Timely
introduction of new products, their acceptance in the market
place and managing the complexity of operations across
various manufacturing locations, would be the key to sustain
competitiveness.
Customer preferences especially in many of the developed
markets seem to be moving in favour of more fuel efficient
vehicles. Further, in many countries there has been significant
pressure on the automotive industry to reduce carbon dioxide