Jaguar Land Rover (JLR) is close to finalising a joint venture deal with Chinese company Chery Automobile, according to reports in China.
As previously reported by Autocar, Tata-owned JLR has been keen to find a partner in China to both manufacture and sell its vehicles.
Reports by China Business News and news agency Reuters suggest the JLR-Chery deal is focused on manufacturing, and could be officially confirmed later this week.
Under Chinese government regulations, foreign car manufacturers can only build manufacturing plants in China if they sign joint venture deals with indigenous brands. They also have to launch Chinese-market-only sub-brands.
Jaguar Land Rover's deal follows several years of negotiations by the UK-based company with potential partners. Both JLR and Chery have refused to comment, but according to the CBN report the companies have finished discussions and are now seeking regulatory approval to proceed with the joint venture.
JLR is rapidly expanding in China and now has almost 100 dealerships, including a new flagship showroom in Beijing that is expected to sell 400 cars a year.
At the start of the year the Chinese and British governments agreed a business deal that included a commitment to sell 40,000 extra JLR vehicles in China.
Most of JLR’s Chinese sales come from Land Rovers. The Chinese-built Jaguars and Land Rovers are expected to only be sold in China.
Chery Automobile was founded in 1997 and is China’s largest vehicle exporter. The company’s exported 107,851 vehicles during the first eight months of this year, an increase of 88 per cent over the same period in 2010.
Chery has been much sought after in recent months for similar deals, with the Chinese government turning down a proposed deal with Subaru earlier this month on account of its ties with Toyota.
The government is trying to limit the rush from foreign car makers to forge joint ventures in China, fearing that the current boom in sales is unsustainable and that it could be faced with production capacity that far outstrips demand.
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