Just a few weeks after getting approval from the Chinese government for a joint venture, Jaguar Land Rover and Chery have formally laid the foundation stone for their upcoming production facility in Changshu in the Jiangsu province of China. This partnership with Chery Automobiles will lead to new models being developed for a partnership brand. JLR and Chery will set up a new research and development centre and an engine manufacturing facility at this upcoming plant.
Tata Motors’ decision to set up a joint venture with Chery in China is indeed a very smart one. China is one of the biggest car markets in the world and already accounts for a majority of profits for the British company. By opting for local manufacturing in China, JLR will be able to further boost profitability. JLR and Chery will also develop models specific to local tastes, which will be sold through a domestic brand which is yet to be named.
Chery and Jaguar Land Rover will also manufacture Jaguar Land Rover vehicles which will be exported. Currently JLR only manufacturers in the UK which results in higher cost of labour. Manufacturing in China will lead to immense cost advantages due to much lower costs of human resources in China. This 50:50 joint venture has been named – ‘Chery Jaguar Land Rover Automotive Company Ltd’. The plant will be complete and ready for production by 2014.
