Chery and Jaguar Land Rover finally agree to Chinese JV

Gasgoo.com (Shanghai March 22) - Chery and Jaguar Land Rover, who finally inked a joint venture partnership yesterday, have been the focus of a lot of media attention. According to a report appearing in Beijing News today, the two manufacturers will each own an equal part of the new joint venture, and both boast a wealth of suppliers to help them. The JV will focus on production of both Jaguar Land Rover vehicles and new own brand models.

According to Chery, both sides have agreed to the cooperation, the specifics of which include the manufacture of JLR vehicles, own brand vehicles and automobile engines, the establishment of a sales network for the JV and the founding of a new research and development center. However, the manufacturer was unwilling to publicly disclose any details relating to the partnership.

The JLR deal is Chery's second JV, with the first being the partnership with Israel Corporation to establish the new Qoros own brand. Tata-owned JLR, for its part, has constantly been searching for a potential Chinese partner. The China region has already become the luxury marque's third largest market worldwide. JLR sales in China grew 60 percent last year, totaling 42,000 units.

JLR CEO Ralf Speth confirmed that the manufacturer plans to invest 100 million pounds sterling ($158.67m) in the project, the goals of which will include establishing a 5,000 man production site boasting an annual production capability of 50,000 vehicles. In a statement to the press, Chery said only that "work by both sides would be done in the [proper] sequence."

Rumors of a partnership between Chery and JLR have begun appearing as early as 2010, however the Chinese party has been extremely tight-lipped about the question. Chery has reportedly been searching to establish a JV with a foreign manufacturer since 2007. The new JV will not only help Chery learn about management from a multinational enterprise, but should also help increase its sales in the country.