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UK’s largest carmaker is contending with challenges including technology and Brexit

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Jaguar Land Rover unveils its first electric SUV

Much like its new electric car, Jaguar Land Rover does not make much noise.

While upmarket rivals including BMW and Mercedes regularly update investors and the media about their plans on electric propulsion and self-driving systems, JLR instead beavers away in the background on new cars, only showing them to the world when they are ready.

On Monday at the Los Angeles motor show, JLR finally unveiled its first electric car — the Jaguar I-PACE — and this has served to put the company’s strategy under the spotlight.

Britain’s largest carmaker is late to join the fast-developing electric vehicle market, where industry upstart Tesla is threatening the position of established carmakers, including JLR. This in turn raises questions about whether the UK company’s relatively conservative approach to key technologies could harm its future prospects.

JLR is also grappling with the possible consequences of the UK’s vote in June to leave the European Union.

Ralf Speth, JLR chief executive, acknowledges the complex issues raised by Brexit, but rejects the idea the company is less innovative than core competitors, and believes the I-PACE sport utility vehicle is strong evidence of this.

“As a small company, we are more mobile than our competitors,” he says in an interview with the Financial Times.

JLR has enjoyed strong growth in revenue and profit since being acquired by India’s Tata Motors in 2008 — partly due to the success of the Range Rover Evoque — but it is now contending with major challenges.

The economic slowdown in China — JLR’s second most important market after the UK — was a key factor in the company in 2015-16 reporting its first decline in annual pre-tax profit during the Indian group’s stewardship. However, in the first half of 2016-17, JLR recorded a profit of £679m, compared to £481m one year earlier, when earnings were depressed by one-off charges.

The company’s financial performance has been affected by Brexit. Although JLR sells only 20 per cent of its cars to EU markets — compared to 80 per cent from UK plants run by Nissan, Toyota and General Motors’ Vauxhall unit — the company buys half its components from continental Europe. This has left JLR with higher costs following sterling’s fall in value since the EU referendum.

Privately, senior JLR directors are “concerned” about Brexit, according to two people who know several company executives well. The company has told the UK government that JLR must enjoy tariff free trade with the EU after Brexit if it is to remain competitive.

The company’s options for moving manufacturing from Britain — if the UK struggles to maintain satisfactory access to the EU single market — are limited because JLR does not own multiple factories in continental Europe.

The company has plants in Brazil and China, but the bulk of its manufacturing is done at its UK factories at Solihull, Castle Bromwich and Halewood.

A large new JLR plant in Slovakia, capable of making 150,000 cars each year as well as doing research and development work, is due to open in 2018.

But acutely aware of its UK heritage in the Midlands region, JLR insists it is not looking for excuses to divert work from Britain. “We want to stay here and make here,” says Dr Speth.

It is notable however that manufacturing of Jaguar’s new I-PACE, including the batteries, is being outsourced, because JLR’s existing factories are running at full capacity.

This is the first time the company has done this — the SUV will be assembled in an Austrian factory owned by Magna, a Canadian carmaker.

In the long term, JLR aims to move the I-PACE assembly to the UK, where the company is considering making batteries.

JLR has secured outline planning permission to build a battery factory in an area known as Whitley South, close to its headquarters in Coventry.

Plans for a much bigger expansion project in the Coventry area, which could provide the company with additional manufacturing capacity on up to 200 acres of land, are also lodged with local authorities, according to two people with knowledge of the proposals. This land could be used to make electric as well as conventionally powered cars.

JLR has been “slow to the party” on electric propulsion, according to Professor David Bailey, an industrial policy expert at Aston Business School.

“They have been sceptical about the electric car market,” he says. “But now they realise they have to enter the market. Tesla have taken a chunk of the premium market and they have to get into it.”

But the industry race is not confined to battery-powered cars. JLR will test a fleet of more than 100 driverless cars on UK roads over the next four years, and, like BMW and Ford, it is cautious about rolling out the technology until these systems can operate vehicles without any human intervention.

This contrasts with Tesla, for example, which is pushing ahead with partially autonomous vehicles now. Daimler’s Mercedes has a similar approach.

JLR will be less affected by the autonomous vehicle battle because “people who buy their cars will be less likely to demand driverless technology”, says one consultant who declines to be named.

Nevertheless, the company faces some “pretty tough headwinds”, including rising technology costs, adds this person.

“Why will people buy Jaguars or Range Rovers in the future? It’s because they want something a bit special,” he says. “The company has a bright future, but it is as a niche brand.”

Pitango, Tel Aviv University, General Electric, Qualcomm, Microsoft, Tata and HNA Ecotech have set up a JV to invest in firms in Israel, according to a report in Globes. The report noted, based on an official announcement, that the investment vehicle JV, named Israel IoT Innovations - i3 Equity Partners, was launched with USD 20m investment. Eran Wagner, and Noga Kap, Israeli entrepreneurs are going to manage the funds allocated under the JV.

Interjet, a Mexico-based passenger airline, could consider selling up to a 49% company stake to a US or Europe-based strategic partner and subsequently conducting an IPO, according to a CNNExpansion video interview of Interjet President Miguel Aleman Magnani.

Interjet is open to inviting a US or European partner to acquire a company stake, but has not identified any specific investor, Aleman was cited as saying in the Spanish-language interview.

Aleman acknowledged United Airlines and American Airlines have been mentioned as potential Interjet investors and that there may be one or two additional potential suitors in Europe. Aleman noted Interjet has also signed confidentiality agreements with additional companies the executive said he was not permitted to identify.

The company would prefer to first take on a strategic partner before conducting an IPO, but could proceed to list its shares on a securities exchange without a partnership investment in the event such an investment failed to materialize, Aleman added.

Aleman was cited in a 27 October newswire report as saying Interjet plans to form a partnership with a foreign peer and is in talks with American and United.

Interjet will begin to operate routes connecting Toronto and Vancouver with Mexico City in 2017, later adding additional Mexican cities Guadalajara and Cancun, and plans to roughly double its current fleet of 90 planes by 2018, Aleman was cited as saying.

Warren E. Buffett beats up on few industries with the regularity he reserves for American airlines.

In a 2007 investor letter, Mr. Buffett, still smarting from an errant $358 million investment in USAir two decades earlier, called the industry a “bottomless pit” for capital. He quipped that investors would have been better served if the aviation pioneer Orville Wright had been shot down at Kitty Hawk.

Now, his holding company, Berkshire Hathaway, is sinking more than $1.3 billion into the four largest American airlines. What gives? It is simple: Mr. Buffett’s love of competitive moats has overridden his fear of flying.

Mr. Buffett inspired a generation of value investors to seek out companies with defensible advantages that could help protect profit — or “moats” in his investment argot. For years, airlines did not fit that definition. They were burdened by high fixed costs, yet prone to price warfare as established carriers and new entrants like Richard Branson and others, abetted by cheap credit from leasing companies, jockeyed for business from fickle fliers.

That is no longer the case. America’s airlines have cut costs, slashed debt (mainly through the bankruptcy courts) and squelched rivals, mostly thanks to a string of mergers that turned a free-for-all into something like an oligopoly. The four companies Berkshire invested in — American Airlines, Delta Air Lines, United Continental and Southwest Airlines — control about two-thirds of the market and posted a $22 billion combined profit in 2015. As Mr. Buffett may now attest, the Wright brothers were not the problem — a competitive marketplace was.

The Waldorf Astoria hotel in Beverly Hills, Calif., was built under a program meant to encourage wealthy foreigners to invest in depressed areas of the United States, Credit Tanveer Badal for The New York Times

A federal program meant to encourage investment in the United States from wealthy foreigners is increasingly supporting large luxury real estate projects, not the development in the rural and downtrodden districts that some say were the original targets of the program.

With billions of dollars flowing in, mostly from wealthy Chinese, the program faces an uncertain future. In September, Congress reset the expiration date on parts of the so-called EB-5 program to Dec. 9.

The program grants permanent residency in the United States to those who are willing to immigrate and invest $500,000 in a business that creates at least 10 jobs. Many of the projects that have received money have been in real estate, though investments have also gone to charter schools, medical centers and manufacturing plants. Some $15 billion of investments have been made through the program since 2005, according to the EB-5 Coalition, an industry group in Washington.

Critics have derided the program as essentially a legal way for immigrants to buy their way into the country.

Donald J. Trump’s election adds a new wrinkle. He campaigned heavily on immigration reform, pledging to build a wall on the Mexican border and increase the deportation of criminal noncitizens. He also said he wanted to reduce legal immigration and ensure jobs are offered to Americans first.

“Whether President-elect Trump will actually follow through on these pledges remains to be seen,” said Stephen W. Yale-Loehr, a law professor at Cornell University and an immigration lawyer. “It is always difficult for Congress to enact significant immigration changes because immigration is so complex and controversial.”

The United States is not alone in offering residence for investment. Germany, Australia and Canada have versions of the program, as do several small countries. Competition among Caribbean nations is rising for their citizenship-by-investment programs, with St. Lucia being the most recent to revamp its program.

Foreign interest is growing. According to an analysis by professors at New York University, investments in the program are increasingly financing large-scale, luxury or entertainment-oriented real estate developments. Among them: nearly $1 billion gathered in the last year from 2,000 investors to build a Chinese-style casino in Las Vegas, $600 million from 1,200 investors for New York’s mixed-use Hudson Yards project and $150 million from 300 investors to construct the Beverly Hills Waldorf Astoria.

The program was intended to reward people for putting money into the United States. Projects that raised more than $1 billion were practically nonexistent in the program before 2010, Prof. Jeanne Calderon of New York University’s Stern School of Business wrote in a March report on the program. But when banks turned off the credit spigot around the 2008 financial crisis, developers started getting more creative in finding alternative financing.

N.Y.U. tracks 27 projects across the United States that have raised more than $5.6 billion from foreign investors.

Views west from 10 Hudson Yards, which attracted $600 million from foreign investors. Credit Pablo Enriquez for The New York Times

Many of these projects are run by large commercial developers who could proceed without any foreign investment but are reaching out to foreign investors for cheaper financing than they would receive from banks.

Reformers from both political parties are calling for a much tighter definition of the areas eligible for investment through the program to remove the tracts in prosperous urban areas and get money to underserved ones. They are also looking at raising the investment minimum to $800,000.

In addition, they hope to make the projects more accountable by requiring better disclosures to protect potentially vulnerable immigrants from fraudulent schemes. Federal securities regulators have filed several enforcement actions against people committing fraud through the program in recent years.

The issue has friends and foes on either side of the political aisle. Senators from rural parts of the country want more development dollars coming to their districts, while those from large cities want to maintain the status quo. As for the immigrants themselves, they are entering the program mostly in an effort to gain permanent residency in the United States, which gives project developers more power.

“Like so many things, there are a lot of people who are adversely affected but only by a little, and there are a very small group of developers who benefit — they win,” said David North, a fellow at the Center for Immigration Studies in Washington.

The Beverly Hills Waldorf Astoria is being developed by Beny Alagem, an Israeli-born American entrepreneur who also owns the Beverly Hilton. It has nine acres and 12 stories and includes a hotel and a residential condominium tower. Three hundred investors contributed $150 million to the project in the form of a loan. It is estimated to create 3,629 jobs.

The Wanda Group, which is the largest commercial developer in China and is owned by the nation’s richest man, is said to be seeking foreign investment program financing for its Wanda Vista Hotel in Chicago. The city approved the project last November. The Wanda Group is also developing One Beverly Hills Hotel next to the new Waldorf in that city.

The Genting Group, a global development conglomerate based in Malaysia, is developing Resorts World Las Vegas with nearly $1 billion of program money. The $4 billion project includes 3,100 rooms and 100,000 square feet of gambling space, restaurants, shops, a panda habitat and a 4,000-seat theater.

Jeffrey Berkowitz is developing SkyRise Miami, a 100,000-square-foot multipurpose entertainment complex and observation tower along Biscayne Bay that will be the city’s highest building when completed. Foreign program investors are contributing 63 percent of the financing through a $270 million loan. About 540 investors are involved in the project, which is expected to create more than 6,000 jobs.

And 350 foreign program investors put up $175 million for Empire Outlets, a mall and hotel complex planned for Staten Island. Goldman Sachs is a partner in the project, which aims to create 4,500 jobs.

All of this investing has created a backlog of uncertain futures. Currently, 22,000 petitions are pending with the Citizenship and Immigration Services, which is directed under the Department of Homeland Security.

The messaging app Snapchat allows motorists to post photos that record the speed of the vehicle. The navigation app Waze rewards drivers with points when they report traffic jams and accidents. Even the game Pokémon Go has drivers searching for virtual creatures on the nation’s highways.

When distracted driving entered the national consciousness a decade ago, the problem was mainly people who made calls or sent texts from their cellphones. The solution then was to introduce new technologies to keep drivers’ hands on the wheel. Innovations since then — car Wi-Fi and a host of new apps — have led to a boom in internet use in vehicles that safety experts say is contributing to a surge in highway deaths.

After steady declines over the last four decades, highway fatalities last year recorded the largest annual percentage increase in 50 years. And the numbers so far this year are even worse. In the first six months of 2016, highway deaths jumped 10.4 percent, to 17,775, from the comparable period of 2015, according to the National Highway Traffic Safety Administration.

“This is a crisis that needs to be addressed now,” Mark R. Rosekind, the head of the agency, said in an interview.

The Florida Highway Patrol is investigating an Oct. 26 crash near Tampa that killed five people. A passenger in one car, a teenager, recorded a Snapchat video showing her vehicle traveling at 115 m.p.h. just before the collision.

A lawsuit filed in a Georgia court claims a teenage driver who was in a September 2015 crash near Atlanta was using Snapchat while driving more than 100 m.p.h., according to court records. The car collided with the car of an Uber driver, who was seriously injured.

Alarmed by the statistics, the Department of Transportation in October outlined a plan to work with the National Safety Council and other advocacy groups to devise a “Road to Zero” strategy, with the ambitious goal of eliminating roadway fatalities within 30 years.

The Obama administration’s transportation secretary, Anthony Foxx, said that the near-term effort would involve identifying changes in regulations, laws and standards that could help reduce fatalities. That might include pushing for all states to tighten and enforce laws requiring use of seatbelts in cars and helmets on motorcycles, while cracking down on distracted or drunken driving. The effort might also include tougher regulation of heavy trucks, Mr. Foxx said.

A second, related effort would focus on setting longer-term goals and speeding the introduction of autonomous-driving technologies that many safety experts say have the potential to prevent accidents by removing distracted humans from the driving equation.

One concern so far, though, is that current generations of automated driver-assistance systems, like the Autopilot feature offered by Tesla Motors, may be lulling some drivers into a false sense of security that can contribute to distracted driving.

Whether highway safety officials in the Trump administration will have the same priorities, though, is too soon to say. The names of candidates for transportation secretary have not yet been publicly floated.

Most new vehicles sold today have software that connects to a smartphone and allows drivers to place phone calls, dictate texts and use apps hands-free. Ford Motor has its Sync system, for example. Others, including Honda, Hyundai and Mercedes-Benz, offer their own interfaces as well as Apple’s CarPlay and Google’s Android Auto.

Automakers say these systems enable customers to concentrate on driving even while interacting with their smartphones.

“The whole principle is to bring voice recognition to customers so they can keep their eyes on the road and hands on the wheel,” said Alan Hall, a spokesman for Ford, which began installing Sync in cars in 2007.

Since then, the company has added features to reduce distractions, like a “do not disturb button” that lets drivers block incoming calls and texts.

CarPlay allows use of the iPhone’s Siri virtual assistant to answer phone calls, dictate texts and control apps like Spotify and Pandora. Both Sync and CarPlay present simplified menus on a car’s in-dash display to reduce driver distraction and turn off the phone’s screen, eliminating the temptation to use the device itself.

But Deborah Hersman, president of the nonprofit National Safety Council and a former chairwoman of the federal National Transportation Safety Board, said it was not clear how much those various technologies reduced distraction — or, instead, encouraged people to use even more functions on their phones while driving. And freeing the drivers’ hands does not necessarily clear their heads.

“It’s the cognitive workload on your brain that’s the problem,” Ms. Hersman said.

Technology in some new cars is meant to reduce driver distractions or compensate for them.

Dr. William Chandler, a retired neurosurgeon in Ann Arbor, Mich., just bought a 2017 BMW X5 sport utility vehicle that warns him if he drifts out of his lane on the highway or if a car is in his blind spot. His favorite feature is a heads-up display on the windshield in front of him that projects his speed, the speed limit and navigation information.

“It puts all the directions and turns right there in my field of vision,” he said. “That’s a real safety factor for distracted driving, because I’m never looking at the map on the screen in the console.”

But new cars make up only a small portion of the 260 million vehicles on the road in the United States. Digital diversion is harder to address in older models.

Brett Hudson, 26, a teacher at a charter school in Jackson, Mich., said his iPhone 6 Plus had become essential to his daily commute in his 2002 Chevrolet TrailBlazer. He uses Apple Maps for navigation, listens to music via Pandora and gets his favorite Michigan football call-in show on iHeart Radio.

To reduce the time he looks at the phone, Mr. Hudson installed an aftermarket Bluetooth system for hands-free phone calls. He mounts the iPhone on a clip attached to an air vent, enabling him to see the screen while still keeping the road in his field of vision.

Mr. Hudson concedes that the setup is not risk-free.

“I’ve noticed that when I do have to touch the phone,’’ he said, ‘‘my brain becomes so totally focused, even in that short period of time, and I don’t really remember what’s happening on the road in those four or five seconds.”

Insurance companies, which closely track auto accidents, are convinced that the increasing use of electronic devices while driving is the biggest cause of the rise in road fatalities, according to Robert Gordon, a senior vice president of the Property Casualty Insurers Association of America.

“This is a serious public safety concern for the nation,” Mr. Gordon said at a recent conference in Washington held by the National Transportation Safety Board. “We are all trying to figure out to what extent this is the new normal.”