Jaguar Land Rover and Chery Form Joint Venture image

On Wednesday, March 21st, Jaguar Land Rover and Chery Automobile agreed to form a joint venture to manufacture and sell Jaguar’s luxury vehicles in China.

Since the Chinese auto market is the largest worldwide, Jaguar relies on China to offset wavering demand in its traditional strongholds of Europe and the U.S. In 2011 auto sales in China grew to about 19% of the company’s total global sales of last year, compared to 1% in 2005. The company sold in this country 42,000 luxury sedans and premium sport-utility vehicles, up 60% from 2010.

JLR currently has a unit in China which imports and sells vehicles directly, but the joint venture company plans to set up a research and development facility as well, and a plant to manufacture engines.

“The terms and conditions of the commercial agreement aren’t being disclosed at this time,” JLR Chief Executive Ralf Speth had said, adding that the company may spend as much as £100 million ($158.5 million) on a proposed China factory.

Jaguar and Land Rover have, between them, three plants in the U.K. two at Castle Bromwich and Solihull in the West Midlands, and the third at Halewood in northwest England.