Environmental OK for Jaguar Land Rover / Chery Plant – China image

China’s Ministry of Environmental Protection has granted its approval for plans by Jaguar Land Rover and Chery to set up a new vehicle production plant in the country.

“This is an important step for JLR and Tata Motors moving forward,” said Vineet Hetamasaria, auto analyst and PINC Research in Mumbai.

JLR, which makes most of its vehicles at three plants in the UK, is a latecomer to manufacturing in China, where its larger premium competitors Audi, BMW and Mercedes-Benz have built cars with local partners for years and are recording record sales.

China is JLR’s third largest market after the UK and US. One in six Land Rovers, Range Rovers and Jaguars built last year were shipped to China, where sales grew to 42,000, an increase of more than 60% in a year.

Production at the new factory will start in 2014. Initial capacity of the car factory will be 130.000 cars annually, by 2020 capacity will reach 250.000 cars. In 2014 the joint venture plans to build 34.000 Range Rover Evoques, 43.000 Range Rover Freelanders and 23.000 Jaguar ‘sedans’, which type or types is yet unclear.

According a source close to the matter, Chery-JLR’s vehicle and engine plants will be located in Changshu, Jiangsu, and next or close to Chery-Quantum’s factory for producing Qoros brand cars. Investment will eventually reach 17.5 billion Yuan.

Official terms and conditions of the commercial agreement are not being disclosed at this time and as such, no further details are available.