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Jaguar Land Rover wants a bite of Chery

Teamwork: Premium car-maker Jaguar Land Rover and budget brand Chery have put their proposed joint venture to the Chinese government.

Proposal for a joint venture between Jaguar Land Rover and Chery in China

Jaguar logo23 Mar 2012

By MIKE COSTELLO

INDIAN-owned Jaguar Land Rover has reached an agreement with Chinese car-maker Chery Automobile to form a joint venture for the Chinese market.

The proposal will establish a new research and development facility in China, manufacture both JLR and joint-venture-branded vehicles, produce engines and distribute vehicles produced by the joint-venture company.

According to Reuters, the new venture would be set up in the east of the country and require an investment of 17.5 billion yuan ($A2.67 billion).

The link-up between the luxury and budget car-makers, which is still awaiting official government approval before going ahead, would be a boost for JLR in China, where demand for luxury cars remains voracious.

China is currently the third-largest global market for UK-based but Indian-owned JLR, though it only accounts for one per cent of sales, which grew 60 per cent last year to 42,000.

 center imageLeft: Jaguar XF Sportbrake, Range Rover Evoque and Chery J1/J11.

Car-makers can only build manufacturing plants in China if they enter joint ventures with local brands and launch Chinese-market-only sub-brands.

In a joint statement, JLR CEO Ralf Speth and Chery Automobile chairman and CEO Yin Tongyao said that the proposal would play to the strengths of the respective businesses.

“Working together on this proposed joint venture is an exciting prospect for both JLR and Chery,” said the statement.

“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.”

Chery is currently China’s number six passenger vehicle manufacturer, selling 643,000 cars and SUVs last year.

It is one of three Chinese brands currently selling passenger vehicles in Australia – alongside Great Wall and Geely – with a range comprising the J1 light car, J3 small car and J11 compact SUV.

More details on the joint venture are set to surface once Chinese government approval has been granted.

The announcement comes two weeks after JLR announced the creation of 1000 new jobs at its Halewood manufacturing facility in the UK to support increased production of the Land Rover Freelander and Range Rover Evoque compact SUVs.

The additional staff will boost the total workforce at the plant to 4500 – three times the number employed there only three years ago.

Halewood will now operate on three shifts, operating around the clock to keep up with global demand.

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