Jaguar, Chery strike JV deal[

Luxury vehicle sales maintain robust growth in 2011 to 950,000 units in China

Britain's largest premium vehicle producer, Jaguar Land Rover, and China's sixth-largest passenger vehicle maker, Chery Automobile Co Ltd, announced on Wednesday that they have agreed on a joint venture in China, the world's largest automobile market.

The agreement follows extensive talks between Jaguar Land Rover and Chery on establishing an equal partnership company, said the statement.

It also said that the scope of the proposed joint venture would include the manufacture of Jaguar, Land Rover and joint venture-branded vehicles.

The venture will also cover the establishment of a research and development facility, engine production and sales of vehicles made by the joint venture.

The official process to establish the joint venture company in China is under way, said the statement.

The terms and conditions of the agreement weren't disclosed.

Chinese media reported earlier this month that the venture will be set up in Changshu, Jiangsu province, a city about 100 kilometers northwest of Shanghai.

The location will be next to the production site of Qoros Auto Co Ltd, a 50-50 joint venture established by Chery and Israel Corp in December 2007, using 3.4 billion yuan ($537.9 million) in registered capital.

It's also reported that the new joint venture, with an estimated investment of 17.5 billion yuan, will start vehicle production in July 2014.

Ralf Speth, Jaguar Land Rover chief executive officer, and Yin Tongyao, chairman and CEO of Chery, said in the statement that the "demand for Jaguar and Land Rover vehicles continues to increase significantly in China and we believe that Jaguar Land Rover and Chery can jointly realize the potential of these iconic brands in the world's largest car market".

They added: "Our ambition is to leverage the respective strengths of our two businesses - in research and development, technological innovation, manufacturing excellence and local consumer knowledge - to offer Chinese customers the most advanced, highly efficient products featuring the very latest technologies."

Wholly owned by India's Tata Motors, Jaguar Land Rover sells vehicles in more than 170 countries.

In 2011, its sales in China surged 60 percent to 42,000 units, making the nation its third-largest market.

"Choosing China as its first production site outside the United Kingdom is a reasonable consideration due to the booming luxury vehicle sector in recent years.

"The sector will maintain its momentum in the coming years," said Jia Xinguang, an independent auto analyst based in Beijing. "It also indicates China's strategic importance in Jaguar Land Rover's long-term global development."

In 2011, luxury vehicle sales maintained robust growth despite a slowing overall market, with combined sales of 930,000 to 950,000 units, accounting for about 7 percent of the total market.

Luxury vehicle sales' average year-on-year growth of 38 percent is far higher than the 5.19 percent growth rate of passenger vehicle sales and the total vehicle market's increase of 2.45 percent.

lifangfang@chinadaily.com.cn