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Jaguar Land Rover, the British luxury car unit owned by Tata Motors, is considering manufacturing vehicles from scratch in India, a report says.
Jaguar Land Rover (JLR) currently assembles some cars in India with parts shipped from Britain. Manufacturing the whole car in India would make it cheaper, as it would save on government import taxes and labour costs.
"Like Brazil, India is one of the possibilities for Jaguar Land Rover to fully manufacture cars," a person close to the development told The Wall Street Journal on Sunday.
However, he cautioned the process was at a "very preliminary stage".
Tata Motors officials were unavailable for comment.
JLR assembles two of its vehicles at its west India plant using kits, engines and gearboxes imported from Britain.
Sales of Jaguar and Land Rover models have been key growth drivers for Tata Motors, part of the sprawling salt-to-steel Tata Group, in recent quarters.
Indian car sales have slowed down in the last year due to high borrowing costs, costly fuel and rises in prices due to increased raw material costs.
Global auto makers such as Ford, General Motors and Nissan have invested millions of dollars in the past few years in India to use the country as a global manufacturing base, where demand for cars is higher than in the West.
Tata Motors bought Jaguar and Land Rover from Ford Motor Co in 2008 for $2.3 billion as part of plans to expand its reach beyond Asia.
The deal vaulted Tata Motors from a commercial vehicle and small-car maker into a global player with luxury brands in its range of offerings.
JLR reported record global sales of 357,773 vehicles in 2012, a 30 percent year-on-year rise, led by strong demand in China, Britain and the United States.