91
Notice
Directors’ Report
(69-103)
Management Discussion & Analysis
Corporate Governance
Secretarial Audit Report
for sale in 2015 andto be the first in a new family of Discovery’s. As
well as hybrid and long wheel base derivatives of existing models.
Complementing the new products, JLR intends to also expand its
global footprint, particularly into those emerging, affluent countries
with growing sales potential and appetite for the Company’s
distinctive, premium products. There are three specific aspects to
JLR’s strategy of geographic expansion:
Increase marketing and dealernetwork in emerging markets.
For example, in China, JLR established an NSC in 2010 to
expand our presence in this key market and have increased
network of sales dealerships to 170 dealerships as at March
31, 2014. Similarly, JLR expect to continue to grow its presence
in the Indian market by opening additional dealerships across
the country.
Establish new manufacturing facilities, assembly points and
suppliers in selected markets. This includes a manufacturing
and assembly joint venture in China with Chery Automobile
Company Ltd.; an assembly facility in India operated by
Tata Motors; and amanufacturing facility in Brazil. JLR also
continues to explore further broadening our manufacturing
base, including opportunities in Saudi Arabia.
Leverage relationship with Tata Motors and the synergies we
can achieve in the areas of research and product development,
supply sourcing, manufacturing and assembly and other
operations.
RISKS:
Deterioration in global economic conditions:
The automotive
industry, and the demand for automobiles, is influenced by
general economic conditions, including among other things, rates
of economic growth, availability of credit, disposable income of
consumers, interest rates, environmental and tax policies, safety
regulations, freight rates and fuel and commodity prices. Negative
trends in any of these factors impacting the regions where the
Company operates could materially and adversely affect our
business, results of operations and financial condition.
The Indian automotive industry is affected materially by the
general economic conditions in India and around the world.
Muted industrial growth in India during FY 2013-14 along with
continuing higher inflation and interest rates continue to pose
risks to overall growth in this market. The automotive industry in
general is cyclical and economic slowdowns in the recent past have
affected the manufacturing sector including the automotive and
related industries in India. Persistence of negative economic trends
or further deterioration in key economic factors such as growth
rate, interest rates and inflation as well as reduced availability of
financing for vehicles at competitive rates could materially and
adversely affect the Company automotive sales in India and results
of operations.
Jaguar Land Rover business has significant operations in the United
Kingdom, North America, continental Europe and China, as well
as sales operations in many major countries across the globe.
The global economic downturn significantly impacted the global
automotive markets, particularly in the United States and Europe,
including the United Kingdom, where Jaguar Land Rover operations
have significant sales exposure. During Fiscal 2014, the automotive
market in the United Kingdom and Europe continued to experience
challenges. Confidence in financial markets and general consumer
confidence have been further eroded by recent political tensions
in North Africa, the Middle East and Ukraine, and concerns of an
economic slowdown in China. Strategy with respect to Jaguar
Land Rover operations, which includes new product launches and
expansion in growing markets such as China, India, Russia and
Brazil, may not be sufficient to mitigate the decrease in demand
for our products in established markets and this could have a
significant adverse impact on our financial performance.
If industry
demand softens because of lower or negative economic growth in
key markets, including China, or other factors, results of operations
and financial condition could be materially and adversely affected.
Economic outlook in India:
The Indian automotive industry is
affected substantially by the general economic conditions in India
and around the world. The demand for automobiles in the Indian
market is influenced by factors including the growth rate of the
Indian economy, easy availability of credit, and increase in disposable
income among Indian consumers, interest rates, freight rates and
fuel prices. Demand for automobiles, particularly passenger vehicles
and commercial vehicles were adversely impacted during FY 2013-
14 due to lower GDP growth, high interest rates and high fuel prices.
During FY 2013-14, RBI increased the key policy rates by 75 basis
