Jaguar Land Rover is setting its sights on expanding into India following its acquisition by Tata Motors in June.

The West Midland company currently has just one distributor in the sub-continent that sells about 70 Range Rovers a year. But chief executive David Smith yesterday said that was about to change.

In his first interview since Ford sold Jaguar Land Rover to Tata for £1.15 billion, Mr Smith said India could join the growing list of developing markets that are helping to insulate the two brands from downturns in traditional markets such as the UK, the US and mainland Europe.

But he warned that business is going to get “a lot tougher” over the next six months as the economic downturn hits luxury car sales in the western economies.

Production levels may be cut at the company’s three assembly plants to prevent stocks building up but no decision will be taken until after the three-week summer shutdown that began on Monday. “We have to be realistic and accept that the next six months will be really tough as the credit crunch affects the ability of customers to finance new cars and that we may have to adjust production. The last thing we want is inventory building up,” Mr Smith said.

Jaguar has not sold cars in India for a number of years, but the brand used to be well known there. Tata group chairman Ratan Tata’s father owned one of the first XK120s to come on the market 60 years ago.

“Since June we have been working on getting more quickly into the Indian market,” Mr Smith said.

“I think it will be a while before that market is as large as China or Russia for premium vehicles, but there is opportunity to sell more than we are at the moment.

“We are looking at establishing some new dealer points in the key cities and getting the service and after-sales in place to make sure we can properly service customers. Then I think we can start accelerating sales.”

Land Rover has become the biggest-selling luxury car brand in Russia, now its third biggest market after the UK and the US, and is beating BMW and Mercedes-Benz. China is the Solihull 4x4 specialist’s fifth largest market.Mr Smith, a former chief financial officer of JLR who took over as chief executive in April when his predecessor Geoff Polites died, said both brands were ahead in terms of sales over the first six months of the year.

He stressed that since being liberated from Ford’s global bureaucracy, JLR was becoming a more entrepreneurial, nimbler business that was able to take and implement decisions much faster than before.

JLR is run by a three-man board consisting of Mr Smith, Ratan Tata and Ravi Kant, managing director of Tata Motors.

Mr Smith, a 47-year-old car industry veteran who was born in a maternity home in Lode Lane, revealed that Mr Tata and Mr Kant were given standing ovations by JLR workers when the toured the company’s facilities following the takeover.

There is no plan to publish separate financial results for Jaguar and Land Rover, but Mr Smith yesterday said that the combined business is profitable.

It yielded some $400 million (£200 million) for Ford in the first quarter of this year and its results for April and May will be known today.