Automaker JLR's China Sales Growth Could Drop by 50% This Year
Automaker JLR's China sales growth could drop by 50% this year.Reuters

Jaguar Land Rover's sales growth in China could drop by about 50% this year and decelerate even further next year, owing to a larger base of comparison and slower expansion of the world's biggest auto market.

A growth of 20% for 2014 will compare with around 40% in 2013, the chief of JLR's China operations, Bob Grace, said.

The sales growth for 2015 could slow "a little bit" more, Grace added, Reuters reported.

China is JLR's biggest and fastest-growing market. Grace was speaking on the sidelines of the inauguration of the automaker's first overseas factory, in Changshu, near Shanghai. The factory is equally owned by China's Chery Automobile and is scheduled to go into full production in 2016.

Grace said: "The market is a little bit slower in the second half compared with the first half.

"As our volume in absolute terms gets bigger and bigger, it becomes harder to keep doing the double-digit growth. I would expect next year to slow a little bit in comparison to this year.

"We'll still see reasonable growth but it won't be the stellar growth we've seen in recent years," he said. Sales will, however, benefit from the new factory."

Fighting the Germans

Manufacturing cars in China will help the subsidiary of India's Tata conglomerate avoid heavy import duties and price its vehicles more competitively.

That will help the British firm challenge its German rivals' dominance of China's luxury car market.

Audi, BMW and Mercedes-Benz collectively control about 80% of that market.

JLR and Chery have agreed to invest 10.9bn yuan ($1.78bn, £1.1bn, €1.4bn) in the facility, which has an annual production capacity of 130,000 vehicles.

China's auto market grew at the slowest pace in 19 months in September. The luxury segment has taken a hit in the wake of Beijing's crackdown on extravagance among public officials.