Jaguar Land Rover (JLR) and Chery Automobile have been granted regulatory approval to form a joint venture in China, the Chinese automaker announced.
The two companies are planning a $1.92 billion joint venture which would help raise the profile of Chery, a mass volume manufacturer that aspires to gain access to the profitable luxury segment dominated by overseas brands.
The deal also marks Jaguar Land Rover’s latest effort to expand its presence in China, where luxury sedans and SUVs are still in high demand, despite the overall car market’s smaller growth.
“We heard the project has been approved, but we have yet to receive the official notice from NDRC,” said a Chery spokesman to a local media outlet about winning the approval from the National Development and Reform Commission.
The new joint venture will be based in Changshu city near Shanghai and will have an annual capacity of 130,000 cars. Initially, Chery and JLR will build SUVs, followed later by Jaguars. Controlled by India’s Tata Motors, Jaguar Land Rover had previously considered JV deals with several other Chinese partners, including Great Wall Motor, but made little progress.
The JV will give JLR a local production facility in China, a very disputed market for luxury car makers like Audi, BMW and Mercedes-Benz.