Chery and JLR Make JV to Build Plant in China

Chery asks government permission to form JV with Jaguar Land Rover in China, where it want to make an investment of 12.1 billion yuan ($1.9 billion).

The new assembly plant is to be built in Changshu in east China’s Jiangsu province and it is expected to produce around 130,000 vehicles annually. The two companies, Chery and JLR, signed a joint-venture agreement in March. Since China requires environmental reviews before any automaker is allowed to build a new assembly plant, the ministry will assess the facility’s impact on the environment. The ministry is expected to give an answer by the end of this month. But even if the ministry approves the project, the company’s still need the approval of the National Development and Reform Commission.

“Demand for Jaguar and Land Rover vehicles continues to increase significantly in China and we believe that JLR and Chery can jointly realize the potential of these iconic brands in the world’s largest car market,” said JLR CEO Ralf Speth and Chairman and CEO of Chery Automobile Company Ltd Yin Tongyao.

Since China is JLR’s fastest growing market, it is clear that the company wants expand in this market. Although in the past JLR used to import cars, it is aware of the fact that to become an important force in China local production is vital, and this can only happen with a joint-venture.