JLR to open assembly plant in China

Jaguar Land Rover (JLR), the iconic UK carmaker owned by Tata Motors, is reportedly planning to start assembling vehicles in China, with a major part of its sales now coming from Asia.

Carl-Peter Forster, the new group CEO of Tata Motors, said in an interview to the BBC, "We will need to manufacture at least two models in China, we'll take one to two years to set it up, but first we will need a partner."

He made it clear that the company was not shifting its production out of the UK.

But opening an assembly plant in China has been on the cards for JLR for quite some time, where sales of its vehicles have picked up considerably since the past year.

When vehicle sales in the UK had plunged last year and JLR was reeling with cash flow problems to run its day-to-day operations, a Chinese trade delegation in to Europe signed a lifeline deal with JLR in February 2009 worth £600 million to purchase13,000 vehicles from JLR over the next three years. (See: China bails out JLR with £600-million order)

The important deal came at a time when the entire UK car industry, especially luxury car maker JLR had lowered production and introduced redundancies in response to the sharp decline in car sales due to drying up of bank loans.