JLR/Chery JV to produce Jaguar and Land Rover branded vehicles
British automotive success story Jaguar Land Rover is to produce Jaguar and Land Rover branded vehicles in China via its joint venture with Chery Automobile Company Ltd. The two companies laid the foundation stone for their new manufacturing facility in China on 18 November 2012 following formal approval from the Chinese Government for their joint venture and a licence to manufacture Jaguar Land Rover vehicles and new models for a partnership brand in China.
Jaguar Land Rover and Chery report that they will now accelerate plans to build a joint venture manufacturing plant in Changshu, near Shanghai, as part of a 10.9 billion yuan investment that will also include a new research and development centre and engine production facility. The 50:50 JV will be called Chery Jaguar Land Rover Automotive Company Ltd.
In a joint statement, at today’s press conference in Jiangsu, Dr. Ralf Speth, Jaguar Land Rover CEO, and Yin Tongyao, chairman and CEO of Chery Automobile Company Ltd, 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.”
Sales sales of JLR cars rose 80 per cent in China in the first 10 months to October 2012. In the 2011 calendar year, Jaguar Land Rover saw sales increase more than 60 per cent, driven mainly by the Jaguar XJ and XF models, and strong demand for the fuel-efficient Range Rover Evoque.
Deal not without risks
Commenting on the Jaguar Land Rover deal, Mohan Sodhi, Professor of Operations and Supply Chain Management at Cass Business School, said: “With every other car manufacturer producing in China, Jaguar’s deal may not seem surprising. Yet the deal is not without risks. Jaguar’s surge under Tata Motors ownership is quite possibly about the ‘Britishness’ of the car, something that Ratan Tata would have recognized as an asset when Tata acquired Jaguar from Ford.
“A ‘British’ car made in China is therefore a possible risk for business. And how do you sell a ‘British’ car, made in China, in neighbouring India? Mitigating this risk however is the fact that China’s manufacturing is no longer connected with cheap and poor quality goods.
“This is also the first time the company will be producing outside the UK, so there are issues of how quality will be maintained across two locations. This risk is mitigated perhaps by Tata’s own experience but it still remains a significant one.”
Related news:
Comments