Jaguar Land Rover and Chery Automobile will invest $1.75 billion to build a new plant in China and create a new brand for the country.
As part of the investment, the 50:50 joint venture will also build an engine plant and a research and development center. The manufacturing plant is to be ready in 2014 but JLR didn’t say which models will be built there.
“China is now our biggest market,” Ralf Speth, chief executive officer of Jaguar Land Rover, said at a press briefing yesterday. “The Chinese economy has grown at a phenomenal rate in recent years and by any western standard, and I’m convinced that it is set to continue to grow at an astounding rate into the future.”
Jaguar Land Rover is the fourth automaker after Audi, BMW and Mercedes-Benz to locate production in China, the biggest vehicle market in the world. The Chinese government allows overseas automakers to enter the country only if they work with local companies to manufacture domestically and avoid the country’s 25% import duty.
During the second quarter JLR’s profit increased 77% to $487 million, with China sales led by the Evoque, which helped the company make up for the loss in Europe. Back in May, JLR announced it will invest 2 billion pounds to introduce 40 new or upgraded model in the following 5 years.