Jaguar Land Rover could announce its partnership with Chinese manufacturer Chery Automobile this week.
The Tata Motors-owned carmaker, which has been discussing the deal for the past few years, is planning to make cars in China because of state-laws that impose heavy import taxes.
It is thought that the partnership could be announced of the next week at the Geneva car show in a deal that would have to give at least 50% of the venture to the Chinese firm. Jaguar Land Rover has already applied for regulatory clearance.
John Leech, head of automotive at investment bank KPMG, urged for closer ties between the British and Chinese governments so that firms can capture more of the Chinese market.
He said that partnerships with Chinese firms are ideal for taking advantage of the new customer base in the country, but come at a price in terms of brand image, as people pay the premium rates for Jaguar, not Chery Automobile.
Export-led demand led to Jaguar Land Rover to announce 1,000 new jobs at its manufacturing plant in Solihull, West Midlands, but the move to manufacture in China could, in the long term, shift some of that demand away from the firm’s UK manufacturing base.