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JLR gets go-ahead for China plant

Mumbai, Sept. 23: Jaguar Land Rover and Chery Automobile have secured regulatory approval to form a 1.2-billion joint venture to make and sell cars in China.

The deal, announced by the Chinese car maker on Friday, marks Jaguar’s latest effort to cement its presence in the world’s largest car market, where sales of premium sports-utility vehicles (SUVs) such as the Range Rover Evoque remain brisk even as the overall car market slows down.

A spokesperson for Chery said the company understood that the project had been approved by China’s National Development and Reform Commission but had not yet received official notice.

A spokesperson for Jaguar in Mumbai declined to comment and added that the British company, owned by the Tata conglomerate, was also awaiting formal written approval from Chinese officials.

The joint venture is to be based in Changshu, near Shanghai, where a Jaguar-Chery factory will have enough capacity to manufacture 130,000 cars a year for the Chinese market.

It is expected to focus initially on making Land Rover models, but will extend to Jaguar later. The two companies have already received approval from China’s environment ministry for the deal, which is designed to increase Jaguar’s access to the country’s rapidly growing premium car market.

Last month, Jaguar revealed a 45 per cent surge in second-quarter profits to more than 500 million, largely because of the popularity of its Range Rover Evoque in China.

“China is strong, especially strong for the luxury market,” Ralf Speth, the chief executive of Jaguar, said. “We have a very low market share in China... therefore we are sure we can continue this growth.”

A push into emerging markets such as China and Russia has been one of the key factors in the revival of Jaguar’s fortunes since the Tatas bought the brands in 2008. The deal will also raise the profile of Chery, a mass-market Chinese manufacturer, which is eager to tap into the country’s demand for quality vehicles.

European manufacturers such as Audi, BMW and Mercedes have been cashing in on the growth of China’s car market, although they have found the going more difficult of late.

 
 
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