Jaguar and Land Rover (JLR) are still small players in the Chinese market, but they may poised to increase their presence with a pending partnership with one of China's largest automakers.
According to Automotive News Europe¸the two British nameplates and their parent company Tata Motors have teamed up with Chinese automaker Chery for a joint venture in China to tune of $2.8 billion. The companies are now waiting for approval from the Chinese government.
"The plan is still subject to the approval of the National Development and Reform Commission at this stage,” an anonymous source told Automotive News Europe. “The size of the investment could be adjusted accordingly."
Tata Motors declined to comment on the matter, but the company had been seeking partners in China in the past. Should the partnership with Chery get the green light, Jaguar and Land Rover would be in a better position to increase production and market share much like its German and American rivals have done in recent years.
It’s unclear if the $2.8 billion would be spent on an existing Chery factory or on a new facility, but the report states that Land Rover SUVs would be first in line for production, followed by Jaguars. Despite the involvement of a Chinese company, there’s a good chance the joint venture will be rejected. Automotive News Europe states that the foreign companies are starting to face more scrutiny from the Chinese government since domestic carmakers have remained uncompetitive. To increase its chances of approval, JLR has reportedly committed to building a research facility with Chery.
"It's hard to second guess the whether the JLR deal would get the green light. But one thing is obvious, it's getting harder and harder for foreign automakers to get joint venture deal in China," said John Zeng, director for industry consultancy LMC Automotive Asia Pacific region.
Source: Automotive News Europe (subscription required)