Jaguar Land Rover confirms Chinese joint venture

JAGUAR Land Rover has confirmed it has reached an agreement to set up a new joint venture with a Chinese partner.

The £1.75bn agreement – as predicted by TheBusinessDesk.com earlier this month – will see JLR partner with Chery Automobile Company Ltd.

The two parties have been in extensive talks for some time and clearance for the venture to proceed has now been granted by the Chinese authorities.

The scope of the agreement includes the manufacture of JLR- and JV-branded vehicles; a new research and development facility; engine manufacture; and the sale of vehicles produced by the JV company.

In a joint statement, Dr Ralf Speth, JLR’s chief executive officer, and Mr Yin Tongyao, chairman and CEO 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.”

Terms and conditions of the commercial agreement have not been disclosed.

Chery Automobile is a relatively new company, having only been founded in 1997. The company is headquartered in Wuhu, Anhui Province.

Since its formation, Chery has emerged as one of China’s largest and most productive automotive manufacturers. It is also China’s largest vehicle exporter to markets in over 60 countries.

Chery products include passenger cars, SUVs as well as engines and transmissions. In 2011, Chery recorded sales of 643,000 units, ranking it sixth among the passenger vehicle manufacturers in China.