Jaguar Land Rover is exploring the production of new Defender vehicles in North America through a proposed collaboration with Stellantis, as the British luxury carmaker looks for a viable route to expand its manufacturing presence in the region.
The Tata Motors-owned company has signed a memorandum of understanding with Stellantis to examine opportunities for vehicles designed specifically for the US market. The products would enter new segments under the Defender brand rather than replicate models currently made at JLR’s plants.
JLR has not disclosed the proposed vehicles, production location, investment, platform or commercial structure. The arrangement remains under evaluation.
“Our approach to North America is that we’ve signed an MoU with Stellantis, looking at producing vehicles which are specific to the US market in North America,” JLR Chief Financial Officer Richard Molyneux said during Tata Motors Passenger Vehicles’ Q1 FY27 earnings call.
“We know we need to get some production on the right side of the tariff barrier, but it makes no sense for us just duplicating production of our existing vehicles,” he added.
Molyneux said JLR’s approach would involve “new vehicles, new segments” under the Defender brand, produced in the US. No manufacturing agreement has been finalised.
US Localisation at Viable Scale
North America is expected to contribute a significant part of JLR’s targeted double-digit revenue growth over the next five years. The company sees the region’s preference for premium SUVs and its large affluent customer base as a strong fit for Range Rover, Defender and Jaguar.
JLR does not believe that establishing a standalone US plant for its existing vehicles would be viable at current volumes.
The company sells around 30,000 Defenders annually in the US, according to management. Molyneux said local production would not be efficient at annual volumes of 30,000 or even 50,000 units.
Working with Stellantis could allow JLR to establish production in North America without investing in a standalone plant. JLR has not confirmed the factory, platform or manufacturing arrangement under consideration.
The memorandum remains exploratory. Any vehicle or production programme would require the companies to reach definitive agreements.
Tariff Protection and Currency Hedge
Producing vehicles in North America could reduce JLR’s exposure to changes in US import duties on vehicles shipped from the UK.
During part of the corresponding quarter last year, JLR paid US duties at 27.5% before subsequent trade arrangements came into effect. The comparison resulted in tariffs showing as favourable in JLR’s Q1 FY27 earnings.
Local production could provide greater protection against future changes in trade policy, particularly as JLR gives North America a larger role in its growth plans.
The proposed Stellantis arrangement could also provide a natural hedge against movements in the pound-dollar exchange rate.
JLR earns a significant share of its revenue in dollars, while much of its production and fixed-cost base is denominated in pounds. Manufacturing in North America could allow part of its dollar revenue to be matched with dollar-denominated costs.
“If that becomes real and goes into production, then we end up with much more of a natural hedge to what is at the moment an extremely large long-dollar position,” Molyneux said.
“That’s another small piece of our thinking behind the move to that MoU with Stellantis,” he added.
JLR also uses financial hedges and dollar-denominated borrowings to manage currency volatility. North American production would add an operating hedge to those measures.
Defender to Lead US-specific Expansion
The Defender brand is central to the proposed programme because of its position in the US and its potential to extend into additional vehicle categories.
Management said Defender wholesales remained strong during the first quarter even as JLR’s total wholesales declined 9.2% year on year.
Range Rover, Range Rover Sport and Defender together accounted for 80.8% of JLR’s wholesale volumes in Q1 FY27, up from 77.2% a year earlier.
JLR and Stellantis are considering products aimed specifically at US customers rather than transferring production of the current Defender to North America. This would allow JLR to retain its existing manufacturing footprint while using the Defender brand to enter new segments.
The talks form part of JLR’s sharper focus on North America. Management said the US accounts for around 40% of the world’s millionaires and has a strong preference for SUVs.
JLR also plans to vary its powertrain mix by region. It expects to sell progressively more combustion-engine vehicles in North America while directing a greater share of its battery-electric vehicles towards the UK and Europe.
The Stellantis discussions offer JLR a possible route to establish North American production without committing to an independent factory. The next stage will depend on the products identified, the platform selected, the manufacturing location and whether the two companies can agree on a viable commercial structure.