Jaguar Land Rover to start production in China this year image

British premium carmaker Jaguar Land Rover will start manufacturing new vehicles in China during the fourth quarter of 2014, as construction on a new plant is underway as scheduled.

Currently, at the new facility in Changshu, Jiangsu province, test operations at the body shop are underway.

The new plant, a joint venture between Jaguar Land Rover and Chinese automaker Chery will have a total capacity of 130,000 units a year, will cost about $1.8 billion and will help JLR to avoid the 25 percent import tariff.

In March 2012, Chinese carmaker Chery and British Jaguar Land Rover announced plans to invest an initial US$2.78 billion in a new Mainland China-based joint venture to manufacture Jaguar and Land Rover vehicles and engines, as well as the establishment of a research and development center and the creation of a new automobile marque.

The new facility underlines the high ambitions of Jaguar-Land Rover in China – a key market for the luxury brand. The automaker competes with Germany’s Audi, Mercedes and BMW.

Last year JLR sold 95,237 new cars in China – up 30 percent compared to 2012. Globally, sales of luxury JLR vehicles rose 19 percent in 2013 to 425,006 vehicles.

The automaker has manufacturing operations in India and announced a new plant for Brazil. In Brazil production is expected to begin in 2016.