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Jaguar to Assemble XF Luxury Sedans in India's Pune Facility

Jaguar Land Rover, a subsidiary of India's Tata Motors, announced Tuesday it will manufacture Jaguar brand cars in India.

The move is seen by some as a way for the luxury car company to make cheaper cars and compete in India with Daimlier, BMW and Audi, as local production will allow for lower taxes, according to the Wall Street Journal. The cars will be produced at a facility in the city of Pune.

"Our best selling models in India are the Land Rover Freelander 2 and the Jaguar XF and this has driven the move to build these products locally," Rohit Suri, vice president of Jaguar Land Rover India, said in a statement.

(Read More: India's Tata Motors Rallies to Record High on Brokerage Upgrades)

He added, "The Jaguar XF has become very popular with our customers due to its sports car performance, outstanding luxury saloon elegance and contemporary individual styling."

GlobalPost's New Delhi correspondent Jason Overdorf added some context to this move.

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"In moving some of its Jaguar manufacturing operations to India, Tata Motors is attempting to cash in on India's booming luxury car market — which has attracted everybody from BMW to Ferrari," Overdorf said.

(Read More: India's Tata Plans to Invest More Than $8 Billion Over Two Years)

He explained that manufacturing Jaguars in India will save local customers import taxes of about 60 percent, making the brand much more competitive there.

"But it remains to be seen if Tata can leverage India's lower cost manufacturing to make Jaguar more profitable for the company in other markets," he added.

Other car companies are making big moves in India, as well.

Head of Audi in India Michael Perschke told Business Standard on Tuesday:

"2013 is a critical year for Audi in India and we will see the announcement of several initiatives on the product and network front. First month of 2013 already saw the launch of new Audi Q5 and I am confident that with the launch of this new Audi R8 we will further consolidate our leadership position in the super sports car segment in India."

According to Daily News and Analysis, the luxury car business has grown significantly — by 30 percent — this past calendar year. BMW and Mercedes reportedly didn't share in that growth due to a general decline in the car industry.