A $1.9bn automotive joint venture project has been given the go-ahead from Beijing.
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Chery and Tata officials lay the cornerstone of the new project Image: Jaguar Land Rover |
After applying for permission to form a joint venture in early March, Jaguar Land Rover and Chery Automobile Co have now received the necessary approvals from the state's central economic planner. Despite new regulations to limit the number of joint ventures in the auto sector being passed earlier on this year, the National Development and Reform Commission (NDRC) has given the go-ahead on the Jiangsu-based project.
The joint venture will require an investment of 12 billion yuan ($1.9 billion) if it is to reach annual targets of 130,000 vehicles and an equal number of engines. Currently, all Jaguar and Land Rover models being sold in China are produced overseas, bringing with them heavy import duties which make it difficult to compete alongside other luxury marques, like Audi, BMW and Mercedes-Benz.
European-based Jaguar Land Rover, owned by India's Tata Motors Ltd, will sign a 30 year agreement with Chery, currently one of China's largest vehicle exporters. Chery has recently applied to form a strategic partnership with domestic automaker Guangzhou Automobile Co in a first-of-a-kind deal to strengthen both parties' place in the competitive market.