In the end of a long drawn out process, Jaguar Land Rover (JLR) has reached an agreement to form a 50:50 joint venture with Chery Automobile Company in China.
This is a shot in the arm for the Tata-owned British luxury carmaker as the local joint venture will bring down manufacturing cost and further boost its sales in China.
China, which accounted for just 1% of JLR's global sales in 2005, is now the third largest market accounting for more than 16% of sales. JLR and parent Tata Motors have been trying for more than two years to strike a local partnership in China to fully tap the growing popularity of JLR vehicles in the country.
The JLR-Chery joint venture will manufacture JLR as well as joint venture-branded products, besides setting up a research and development centre. It will also do engine manufacture and sale of vehicles produced by the JV company.
"Demand for Jaguar and Land Rover vehicles continues to increase significantly in China and we believe that JLR and Chery can jointly realise the potential of these brands in the world's largest car market," said Ralf Speth, Jaguar Land Rover chief executive officer and Yin Tongyao, chairman and chief executive officer of Chery Automobile Company in a joint statement here.
JLR did not disclose the timeframe for the roll out of the JV products.