The Reasons Behind Jaguar Land Rover’s Greater Bet On America

Rumors of a third Land Rover Defender are growing as JLR considers shifting production to the U.S. to avoid tariffs and tap into the lucrative American off-road market. Collaborating with Stellantis, JLR aims to enter new segments and offset declining sales in China by localizing high-end vehicle manufacturing.

JLR is exploring U.S.-based production through a partnership with Stellantis to bypass high import tariffs and boost profitability. Facing a decline in the Chinese market and stiff competition, the automaker plans to build new, locally manufactured Defender models to better compete in the American off-road sector.

JLR CEO Richard Molyneux confirmed a new partnership with Stellantis to develop a Defender-based model for new market segments. By localizing production in North America, JLR aims to avoid import tariffs and increase profitability, mirroring the strategy of rivals like BMW, Mercedes-Benz, and Volvo.

Furthermore, this investment serves to insulate JLR against fluctuations between the U.S. dollar and the British pound. “This provides us with a more significant natural hedge against what is currently a substantial, long-dollar position,” stated Molyneux.

JLR CEO Richard Molyneux explained that localizing current Defender production is not viable at a scale of 30,000 units annually. To enter new segments, JLR plans to collaborate with Stellantis on new Defender-branded vehicles, potentially using the Jeep Wrangler’s body-on-frame platform to create a dedicated off-roader to compete with the Ford Bronco.

JLR is shifting its focus to the U.S. market to combat declining sales in China, where the company saw a 26% drop this past quarter. With China becoming increasingly challenging, JLR is leveraging the U.S. market—its most profitable region—to support its goal of 10% annual revenue growth and higher average vehicle prices. By prioritizing North American expansion, the firm aims to escape volatile market conditions and capitalize on the higher margins that U.S. buyers provide for their premium lineup.

• See Also: Stellantis And JLR Partnership Will Not Involve Europe