Jaguar Land Rover will make vehicles in China for the first time after agreeing a £1 billion joint venture with the Chery Automobile Company.
The West Midlands-based car-maker, which is owned by India’s Tata Motors, began talks with Chery months ago, but had been awaiting approval from Chinese officials. It described yesterday’s green light as ushering in a “milestone” deal between the firms.
Jaguars and Land Rovers will be built at a new facility at Changshu near Shanghai, as well as joint-venture branded vehicles aimed specifically at the Chinese market. A research and development centre and engine production plant will also be built, with the main manufacturing operation expected to be completed during 2014.
A joint statement released by the Chinese and British companies said: “We are delighted to have reached this milestone, achieved thanks to the understanding and foresight of the Chinese authorities, and we want to thank them for recognising the potential of our joint venture in the fast-growing Chinese market.
“Together, we will now begin working in close collaboration on our partnership plans to harness the capabilities of our respective companies to produce relevant, advanced models for Chinese consumers.”
Jaguar Land Rover said any cars produced in China would be in addition to its existing output and it stressed that it had no intention of moving its manufacturing base out of the UK.
The group has seen a dramatic turnaround in its fortunes in recent years, after the car market collapsed in the recession and it slumped to a loss.
Boosted by strong growth in emerging markets and the popularity of recent models, such as a version of the Jaguar XF with a 2.2 litre diesel engine, it has announced plans to increase production in the UK.
It is expected to create hundreds of posts at its Halewood plant as it ramps up production of the Range Rover Evoque, including a new version that popstar-turned-fashion-designer Victoria Beckham helped create.
The workforce in Merseyside will rise to almost 4,500 – treble the number employed there three years ago.
Jaguar Land Rover is also creating hundreds of jobs at its factory in Solihull near Birmingham as part of plans to launch 40 products over the next four years, and it is building a £355 million engine plant in Wolverhampton.
Sales of Jaguars and Land Rovers in China have risen by about 80 per cent so far this year as the company looks to expand in the booming communist country.
The strong demand helped drive a record £1.5bn annual profit at the resurgent car-maker. Results in May revealed a 35 per cent rise in its surplus for the year to 31 March.