Perhaps it’s a recognition that the black stuff at the bottom of those holes in the desert may eventually dry up, or that competition from American natural gas production made possible by “fracking” will drive down the price oil, but Saudi Arabia is recognizing that basing its limousine lifestyle on one product is economically unhealthy. Saudi Arabia is exploring manufacturing as an added source of income. Jaguar Land Rover announced an agreement with the oil-richened kingdom to develop an “automotive facility” there.
The agreement—a letter of intent between Jaguar Land Rover and Saudi Arabia’s National Industrial Clusters Development Program (NICDP)—just calls for investigation into some sort of facility not yet specified. However, a statement by Jaguar Land Rover notes that “opportunities have already been identified in aluminum component production.”
Ironically enough, the news of the Jaguar Land Rover/NICDP agreement comes as a joint venture between Saudi Arabian Mining Company and the American aluminum giant Alcoa will open “the world’s largest integrated aluminum complex,” beginning production in 2014 at the Ras Al Khair facility, exploiting another natural resource of the Saudi family’s peninsula.
Product from the Alcoa plant creates manufacturing opportunities, according to Jaguar Land Rover, because of the extensive use of aluminum in the vehicles it builds. The recently introduced 2013 Range Rover is billed as the world’s first all-aluminum monocoque-body luxury sport utility vehicle.
In a prepared statement, Dr Ralf Speth, Jaguar Land Rover CEO, said: “We are committed to further international partnerships to meet record demand for our highly sought after vehicles. The Kingdom of Saudi Arabia is an attractive potential development option, complementing our existing advanced facilities in Britain and recent manufacturing plans to expand in other countries including India and China.”
For his part, His Royal Highness Prince Faisal Bin Turki bin Abdul Azi Al Saud said that the Saudi Arabian government “has expressed its intention to initiate, develop and support the automotive industries” and sees Jaguar Land Rover as a potential partner.
Jaguar Land Rover recently announced a joint venture with China’s Chery Automobile Company Ltd to manufacture vehicles at a new plant near Shanghai, China, and will also increase Jaguar Land Rover assembly at the company’s plant at Pune, India. Jaguar Land Rover is owned by the India’s Tata Motors. Jaguar Land Rover wants to increase production in developing countries where growth in sales is expected…and we suspect, where costs are likely to be lower as well.
When announcing the letter of intent, Jaguar Land Rover did not say when the detailed feasibility studies now under way will be completed. But it may indeed herald the day when instead of pouring a little bit of Saudi Arabia into the tank of your Jaguar or Land Rover, the tank and other parts of your Jaguar or Land Rover may actually be bits from Saudi Arabia. And fueled perhaps by North American natural gas?