Chinese carmaker, Chery, is seeking formal government approval for the first tranche of its CNY12bn joint venture.
Chery Automobile Co has formally applied for permission to establish it's recently announced joint venture with Tata-owned Jaguar Land Rover, with an initial investment of CNY 12.1 billion ($1.2 billion). If it obtains the necessary permits from the Ministry of Environment Protection, the inital investment by the partnership will be used to build a plant in the city of Changshu, Jiangsu province and will produce up to 130,000 vehicles per year.
The main factor likely to influence the local ministry’s decision will be the plant’s potential impact on Changshu’s environment, in accordance with national policy. Even if the ministry approves the project, Chery will still need approval from National Development and Reform Commission, the nation’s top economic planning agency.
As previously reported by OATS, the outline deal was signed by the two companies in March, in an agreement is scheduled to last three decades unless terminated or extended. Jaguar Land Rover has agreed to spend CNY 3.5 billion ($533 million) for a 50% share in the new joint venture.