JLR-Chery to invest $1.75 bn in manufacturing facility in China

Jaguar Land Rover, a subsidiary of Tata Motors and the largest manufacturer of premium cars in the UK, and its Chinese joint venture partner Chery Automobile Co, will invest 10.9 billion yuan ($1.75 billion) to build a manufacturing facility in China.

The $1.75-billion investment includes setting up a manufacturing plant in Changshu, near Shanghai and a new research and development centre and engine production facility.

Under Chinese laws, in order to sell cars to Chinese government agencies, overseas carmakers who set up local joint ventures must set up joint research and development facilites and invest 3 per cent of the annual proceeds of the venture in R&D for at least two consecutive years, and also develop and build their own car brand.

The 50:50 JV called Chery Jaguar Land Rover Automotive Company Ltd, will create a new brand tailored specifically for the Chinese market, including the marketing and distribution. Building a new engine plant for production of fuel-efficient engines is also part of the JV agreement.

In a joint statement issued over the weekend, Dr.Ralf Speth, CEO of JLR, and Yin Tongyao, chairman and CEO of Chery, said, "We are delighted to have reached this milestone, achieved thanks to the understanding and foresight of the Chinese authorities and we want to thank them for recognising the potential of our joint venture in the fast-growing Chinese market.

"Together, we will now begin working in close collaboration on our partnership plans to harness the capabilities of our respective companies, to produce relevant, advanced models for Chinese consumers."