Luxury auto maker Jaguar Land Rover, owned by India's Tata Motors, said Tuesday it was looking at setting up a plant in Saudi Arabia as it seeks to tap into growing regional demand.
Britain-based JLR said it signed a letter of intent with a Saudi government body to consider opening the plant but that no detailed discussions had been held between the two sides.
"This is an exciting project that could enable Jaguar Land Rover to establish a joint venture partnership in a part of the world where luxury vehicle sales are expected to rise," JLR chief executive Ralf Speth said in a statement.
The announcement comes after JLR said last month it would construct a plant with leading Chinese automaker Chery Automobile Co to make vehicles at a new plant near Shanghai to tap surging Chinese demand for luxury autos.
JLR and Saudi Arabia's National Industrial Clusters Development Program will now conduct "a detailed feasibility study together to determine the viability of setting up an automotive facility," JLR said.
Saudi Arabia "is an attractive potential development option," Speth said, adding JLR was committed to new international partnerships to meet demand.
The agreement "is clearly exploratory at this stage," a JLR spokesman told AFP.
But JLR said it has already identified opportunities in Saudi Arabia in aluminium parts production.
The preliminary plans call for the JLR plant to be built next to the world's largest aluminium complex, a joint venture between Saudi Arabian Mining Co and Alcoa of the United States, due to start production in 2014.
JLR's expansion plans follow a sharp rise in sales to emerging markets. In this calendar year, sales in the Middle East and North Africa have increased by more than nine percent.
Tata Motors bought JLR from Ford in 2008 for $2.3 billion as part of plans to expand beyond Asia and the company accounted for 63 percent of the Indian firm's revenues in the last financial year.