China Watch : JLR explores potential JV with Great Wall Motors

Automotive News Europe, 21st February, 2011

BEIJING (Reuters) – Jaguar Land Rover is in talks with top Chinese SUV maker Great Wall Motor Company Limited (GWM) about a potential China partnership, two executives told Reuters on Monday.

JLR, a unit of India’s Tata Motors Limited, is among a very few top-line global brands that do not have manufacturing arrangements in China, where rivals Audi, BMW, Mercedes-Benz and others already have racked up stellar sales.

“The two companies are exploring opportunities for a cooperative effort. Senior executives of Jaguar and Land Rover came over and visited our plant earlier this month,” a Great Wall executive said.

“It’s fair to say that contacts between the two parties have already passed the initial stage, but no final decision has been reached so far,” a second executive with direct knowledge of the talks told Reuters.

Great Wall Chairman Wei Jianjun met with JLR’s senior executives during their China tour, said the second executive.

Financial turnaround

The JLR unit, which Tata Motors bought from Ford Motor Co. in 2008 for $2.3 billion, was initially losing money, but it made a turnaround in the last few quarters and posted a profit of 19.58 billion rupees (about $434 million) for the three months ended December.

China was the unit’s fastest growing market in 2010, according to JLR Chief Financial Officer Ken Gregor. He said sales in the country jumped 95 percent during the year to 26,114 units.

A tie-up in China, the world’s top auto market, would help solidify JLR’s longer term growth, industry insiders said.

Tata Motors units have had contacts with other potential partners in China, including Chery Automobile Company Limited and Jiangling Motors Corporation Limited.

A partnership with Jaguar and Land Rover would also be complementary for Great Wall, which currently makes mass-market products, including sedans and pickup trucks.

[Source: Automotive News Europe/Reuters]

Clive Goldthorp

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