Jaguar Land Rover and Chery Automobile Company have reached agreement on their proposed joint venture in China. The scope of the proposed joint venture would include manufacture of Jaguar Land Rover and joint-venture branded vehicles; establishment of a research and development facility; engine manufacture; and sale of vehicles produced by the joint-venture company, which so far has no official name.
Under Chinese government regulations, foreign car manufacturers can only build manufacturing plants in China if they sign joint venture deals with indigenous brands. They also have to launch Chinese-market-only sub-brands.
Jaguar Land Rover's deal follows several years of negotiations by the UK-based company with potential partners.
In a joint statement, Ralf Speth, JLR chief executive and Yin Tongyao, chairman and chief executive of Chery Automobile, said:“Working together on this proposed joint venture is an exciting prospect for both JLR and Chery. Demand for Jaguar and Land Rover vehicles continues to increase significantly in China and we believe that JLR and Chery can jointly realise the potential of these iconic brands in the world's largest car market.
“Our ambition is to leverage the respective strengths of our two businesses - in research and development; technological innovation; manufacturing excellence and local consumer knowledge- to offer Chinese customers the most advanced, highly efficient products featuring the very latest technologies.”
The precise terms and conditions of the commercial agreement have not been disclosed. Most of JLR’s Chinese sales come from Land Rovers. The Chinese-built Jaguars and Land Rovers are expected to only be sold in China. Chery Automobile was founded in 1997 and is China’s largest vehicle exporter.