Jaguar Land Rover, the U.K. luxury-car unit of Tata Motors Ltd., has cut its sales projections in China, the largest automobile market in the world, despite bringing down prices to entice customers.
A Bloomberg report said Jaguar Land Rover has reduced prices of its China-produced Evoque SUV by 50,000 yuan ($8,000) to 398,000 yuan. The report added that the Jaguar Land Rover has also adjusted its production to stabilize retail prices and help dealers in China.
Jaguar Land Rover made the move as the China's carmaker association said its expects slower growth this year and the Chinese joint venture partner of BMW AG also said profits may not reach earlier projections.
Jaguar Land Rover has seen its sales in China weaken this year as demand fizzles due to a slowing economy and with locals fearful of spending on luxury items amid the government's austerity and anti-corruption drive.
Last June, Reuters reported that the company has tapped Mark Bishop, a former executive of Porsche China, to take over sales and marketing of its vehicles as well as for cars manufactured by Chinese partner Cherry automobile. Jaguar Land Rover is estimated to get about a quarter of its sales in China.
An article on the Wall Street Journal noted that Jaguar Land Rover invested 10.9 billion yuean in China to boost its brand and take advantage of lower labor costs, avoid import tarrifs and source cheaper parts. The company was expecting the move will also bolster its brand in the country after it opened the plant in October and began selling the locally made Evoques earlier this year.
Jaguar Land Rover's image has instead been hurt by problems with its Evoques SUV. The company was forced to recall more than 36,000 of the vehicles due to problems gearbox, which it allegedly was aware of.
