JLR negotiating new joint venture with Chery Automobile

Posted on 3 Feb 2012

Jaguar Land Rover (JLR) is negotiating with Chinese-owned Chery Automobile to establish a joint venture producing luxury vehicles in China for a booming middle class.

While the deal is yet to be finalised, commentators have said that it is almost definite that the deal will go through – perhaps as early as the Beijing Auto Show in April.

JLR enters the negotiations with its eye on a rapidly growing Chinese middle class increasingly hungry for luxury British-made goods. China is the world’s second largest economy, and imports into the country are rising at a very fast pace.

Owned by India’s Tata Motors Ltd, JLR said in May last year it had created a short of potential Chinese partners, but without providing details.

China requires overseas carmakers to work with Chinese manufacturers, who must own at least 50% of joint ventures in order to set up production.

Commenting, Juergen Maier, a fund manager at Raiffeisen Capital Management said: “It’s a smart move by Tata Motors. It makes sense for Tata to have local production in China as it helps reduce the prices as well as cater supply more closely to the Chinese demand.”

Neither JLR or Chery Automobile wanted to comment on the negotiations or upcoming joint venture.