Foundation stone for first JLR-Cherry JV in China laid
Shanghai: The Tatas-owned Jaguar Land Rover (JLR) and its Chinese partner Chery on Sunday laid the foundation stone for their first manufacturing facility to build Jaguars and Land Rovers in China, the world's largest car market, under a "milestone" deal worth nearly 1.75 billion.
JLR and Chery Automobile Company Ltd, the British and Chinese carmakers, had recently received formal approval from the Chinese Government for their 50:50 joint venture to make luxury limousines and off-roaders in the booming Communist nation.
JLR and Chery will now accelerate plans to build a joint venture manufacturing plant in Changshu, near the east chinese metropolis Shanghai, as part of a 10.9 billion yuan (nearly 1.75 billion USD) investment that will also include a new research and development centre and engine production facility.
The project includes the creation of a new partnership brand to assemble models tailored specifically for the Chinese market, including the marketing and distribution.
The benefits of the joint venture to China include investment, job creation, advanced technology and low carbon solutions.
"The JV underlines a firm commitment from both companies to the world's largest car market for the long term future," both companies said in a joint statement.
Speaking to reporters, Dr. Ralf Speth, Jaguar Land Rover Chief Executive Officer, and Yin Tongyao, Chairman and Chief Executive Officer of Chery Automobile Company Ltd, 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."
China is now the world's biggest car market having surpassed the United States in 2009 in the number of vehicles sold annually with sales last year totalling 18.5 million vehicles and set hit 30 million by 2020.
The name of the new joint venture company was also confirmed by Speth and Yin. The equal partnership will be called - Chery Jaguar Land Rover Automotive Company Ltd.
In addition to established vehicles, the partnership will also produce models for a domestic brand tailored specifically to local customer demand.
Both companies are committed to investing heavily into product innovation and advanced technologies using a new Research and Development Centre, more details of which will be released at a later date.
The two companies plan to complete the Changshu facility during 2014. Construction of a new engine plant for production of fuel efficient engines is also part of the JV partnership agreement.
The confidence of Chery's partnership with Jaguar Land Rover follows rapid expansion of the Jaguar and Land Rover brands in China, where sales rose 80 percent in the first 10 months to October 2012.
In the 2011 calendar year, Jaguar Land Rover saw sales increase more than 60 percent, driven mainly by the Jaguar XJ and XF models, and strong demand for the fuel-efficient Range Rover Evoque.
The partnership with Jaguar Land Rover signals the start of international expansion and strategic development for Chery Automobile.
Jaguar Land Rover (JLR), a wholly-owned subsidiary of Tata Motors, is the largest manufacturer of premium vehicles in the UK.
The company, with a global workforce of around 25,000 employees, sells vehicles in more than 170 countries. The UK, North America and China are its largest markets.
Jaguar Land Rover PLC, the holding company for Jaguar and Land Rover, reported profits before tax of 1,507 million pounds in the financial year 2011-12, on revenues of 13,512 million pounds.
In 2005, sales in China accounted for one percent of combined Jaguar and Land Rover sales. It is now one of Jaguar Land Rover's main markets and is still growing; sales increased by 80 percent during the year to October 2012.