The National Development and Reform Commission has approved the Chery-Jaguar land Rover’s 12 billion yuan ($1.9 billion) JV.
No official announcement has been made about the approval, but sources from Chery Automobile confirmed the decision. After only four months of waiting, the NDRC offered fastest approval for an auto joint venture over the past five years. It seems that this tie-up will be last as officials from China’s Ministry of Industry and Information Technology said that no other JVs are expected to be approved.
The two automakers will make an investment of $1.9 billion to build a new facility in Changshu, a city located 100 kilometers from Shanghai. The plant is expected to be finished in July 2014 and to manufacture 130,000 vehicles annually. Almost 60% of its capacity will be used to build the Land Rover SUVs, which means a substantial profit taking into consideration the double-digit growth of SUVs in the Chinese market over the past two months.
In the first seven months of the year JLR sold 47,000 SUVs in the Chinese market, almost double compared with the same period last year. Chery on the other hand was helped by government’s subsidies, due to poor car sales and increased losses in the country.