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Jaguar Land Rover Deal With Chery Includes More Than Just A Production Site

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Ralf Speth and Yin Tongyao

Ralf Speth and Yin Tongyao

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China is currently the single biggest market for Jaguar Land Rover, so it should come as little surprise that the British firm already has an alliance deal with one of China’s biggest automakers, Chery, and will soon be establishing its first design center outside the UK in China.

This week, Jaguar Land Rover has announced together with Chery that it has received approval from Chinese regulatory authorities for the formation of a new joint venture, as well as a license to manufacture cars locally.

First announced in March of this year, the scope of the joint venture, valued at approximately $1.75 billion, includes the manufacture of Jaguar and Land Rover vehicles in China; the establishment of a research and development facility; engine manufacture; and the sale of Jaguar and Land Rover models in an expanded dealer network stretching across China.

In addition to established vehicles, the joint venture will also produce models for a new brand tailored specifically for the Chinese market, including the marketing and distribution.

Production of a new factory is already underway at a site in China’s Jiangsu Province, which is expected to be operational by the end of 2014. Construction of an additional factory for production of fuel efficient engines is also part of the deal.

The first vehicle to be built at the Chinese factory is expected to be the Land Rover LR2, however, there are plans to build a much greater variety of models eventually.  

“For the first time one of the most famous names in the British automotive industry, Jaguar Land Rover, is poised to begin manufacturing in a market outside the UK,” CEO Ralf Speth said in a statement.

His counterpart at Chery, Yin Tongyao, said, “Together, we will now begin working in close collaboration on our partnership plans to harness the capabilities of our respective companies, to produce relevant, advanced models for Chinese consumers.”

As mentioned, China is now Jaguar Land Rover’s biggest market. For the first three quarters of the year, Chinese buyers snapped up 53,000 of the British automaker’s models, an 80 percent rise from just one year ago. The stylish Range Rover Evoque accounted for 20,000 of the sales, while the rest were made up mostly of XF and XJ sedans.

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