News : Jaguar Land Rover’s China deal goes ahead

Keith Adams

Jaguar Land Rover’s Joint Venture with Chery Automobile has been ratified by the National Development and Reform Commission in China. This means that the British company will be building cars with the Chinese manufacturer in a £1.1bn deal that should see car production begin at a new manufacturing plant in Changshu, near Shanghai.

The joint venture will go beyond manufacturing alone, with a new research and development and engine production facility also being inaugurated. The cars produced in the joint venture will be new China-specific models under a new marque name. A spokesperson for JLR said: ‘The joint venture will blend together the heritage and experience of luxury premium vehicle manufacturer Jaguar Land Rover with the intricate knowledge and understanding of Chinese customers evident at Chery.’

The new partnership will be called Chery Jaguar Land Rover Automotive Company and will help the company grow significantly in the Chinese market. AROnlineinterviewed Jaguar Land Rover’s Andy Griffiths, who has responsiblilty for Operations and Business Development, China and Asia Pacific at the Beijing Motor Show earlier this year and he was delighted with the company’s growth, but wanted to make this its largest market, ahead of the US and UK.

The massive growth of Land Rover in this region has certainly increased confidence. Beijing’s newest Jaguar Land Rover dealer will sell more cars in one year than the number sold in some European countries…

Commenting on the partnership in a joint statement, JLR’s Chief Executive Ralf Speth and Yin Tongyao, Chairman and Chief Executive Officer of Chery, said: ‘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.’

Keith Adams
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  1. Tata/JLR success once again – who would have thought it only 7 years ago!!
    What they must surely be planning now is a ‘smaller premium ‘ brand to sit below the new X-Type replacement, to compete against the A3, 1 Series, Mini etc,- car sizes that would never be right with a Jaguar badge on?
    What names do they have the rights to now in their portfolio?

  2. This is excellent news and hopefully another step to becoming a true competitor to the big 3 German luxury brand.

    @1 One name which they do have which has a good reputation in many countries is ROVER.

  3. Who’d have thought Merc, BMW, Audi and Lexus would all have ‘small’ cars in their ranges 10 years ago? I don’t understand why Jaguar shouldn’t be able to replicate the success of the A/B Class, 1 Series, A1/A2/A3 or CT. Those brands each produced smaller cars that stay true to their heritage, as well as diversifying in to SUVs, growing their business and increasing sales. Why not Jaguar?

  4. That said, after what TATA have achieved with LR and Jaguar, it does make you wonder what they could do with Rover doesn’t it….!?

  5. Such a shame Triumph is held by BMW….
    This brand would sit perfectly again (remember JRT) as an entry level to the family of brands that besides compact premium saloons/ hatches, could also have sub F-Type roadsters as well.

  6. I think some small to medium zippy tourer cars with the Lanchester bagdge might work. it does sound of fuddy duddy but on the other hand its got a a very English sound about it and on the Chinese accent could be confused with Lancaster (Bomber) how cool would that be!.

  7. Rover would work well as a competitor to Roewe, and tie in with LR, especially if they export the products.

    The other option would be a bit cheeky perhaps – Daimler.
    The confusion with Mercedes / Daimler Benz could be used to their advantage….

  8. Not good news and the “thin-end of the wedge”. How long will it take for “cheaper production” Jaguars and Land Rover /Range Rovers, to be made solely in China + NOT the UK anymore?
    Another blow to UK manufacturing me thinks..

  9. @9 The companyhas already stated that this wont affect any UK jobs etc,its the heavy import duties in china that have possibly led to this joint venture.

  10. @9 – An outdated theory. The advantages of offshoring manufacturing to China is deminishing as labour costs begin to rise. This is all about cirmventing Chinese tariffs to the benefot of JLRs profitability. No different to the tie ups BMC had with Innocenti and Authi in the pre-EU days.

  11. Off shore manufacturing has not seemed to dent the German manufacturing hub. BMW, Merc, VW all have a huge German base and off shore manufacturing. may be we could learn from them?

  12. JLR have already confirmed that the JV cars will have a new name and will not reuse a marque from their portfolio so it’s pointless speculating. As to the models themselves the word is that they will be SUV’s spun off the Freelander platform. The JV will of course also produce the standard LR, RR and Jag models for Chinese consumption

  13. I find this news rather worrying, there is so much that could go wrong. Yes it gives JLR more access to china, and the likes of BMW have similar ventures while remaining German.

    However, BMW is owned by the Germans, and the German government protects and cares about the countries manufacturing. Tata is Indian and our government doesn’t give a damn about industry.

    Even if Tata is on the level, can China be trusted? Will they simply steal the intellectual property? Start making their own versions of JLR models, and abandon the deal?

    The real issue this highlights is the one sided nature of world trade. China protects its markets, and says you want to sell here, make it here. We have no protections, and our industry has been hollowed out.

  14. Tata know better than to risk the intrinsic “british-ness” of JLR and IP theft in China is not so commonplace as it once was. The fact is the new affluent Chinese middle classes want to drive a real Jag or RR, not a Chinese copy. Now that western manufacturers are firmly set up in China and the people are free and able to buy them the market for Chinese clone cars has all but disappeared. Chinese manufacturers themselves are keen to move away from that kind of practice as well as they seek to establish themselves on the global stage.

  15. Comment 15. – The intrinsic “British-ness”?.
    I do know what you mean …But the British public are no different to the Chinese in “thinking” they have purchased a “British” car, when infact, its NOT.
    Eg. We are fooled in buying a “British MG6”, which lets face it…Are Chinese built using (mainly) Chinese supplied components that we just screw together + sell as “British built”.
    Also; Didnt the Rover buying public regard the Rover City as “British” (even though it was actually built in India)…Then there’s the new “British” Mini 4×4 – Built in Austria…The Aston Martin Rapide – Also,built in Austria ..and what about the Bentley Spur…built at the Phaeton factory, in Germany and sold as a “British Bentley”.

    And if its NOT a British car…Dont we love our “German built” Audi TT’s (Built in Eastern Europe…because its cheaper than German labour).

    This, therefore, is NO different to the Chinese (once they quickly gain the know-how! + just look at the Koreans + Kia!) selling back to us, a “British Range Rover”…identical to the Solihull ones…but ALOT cheaper to build…Despite (Chinese) “Labour costs beginning to rise”…as they’re labour rates will be no-where NEAR the money that a Solihull factory worker gets + along with his pension,welfare etc.

    I just wouldnt trust ’em …and the Chinese are just in it for their own good…and once Co’s realise the Chinese can build cars as good,cheaper and identical as the currently built British ones…we’re doomed…unless we go “Norwegian” and slap a 300% import tax on anything imported – which is unlikely + by then, our car factories would be shut.

    Therefore (sadly);I stll feel its “Bad-news” for British Car manufacturing (as a whole)for the very near future..which is why Bartelbe (No.14) is correct, in saying this “news is rather worrying.. “

  16. I think the whole notion of a cars nationality is something of a moot point. We as car enthusiasts can debate it all day long but the general car buying public don’t know where their cars are built and I suspect the vast majority don’t care either.

    As to the Chinese being in it for their own gain – well they are hardly going to be in it for anyone elses are they? Tata have made assurances that cars built in China will be for the Chinese and surrounding markets only and that models for European consumption will still be built in the UK. Now, I agree that all such assurances should be taken with a pinch of salt but for the time being at least they are backing up their words with action. JLR has taken on extra staff at Solihull, Whitley and Castle Brom and they are building a new engine assembly plant in the Midlands as well. Tata even has its european R&D centre at Warwick. Of course all that could change and they could outsource production in the future to China, India and elsewhere but you can only go on the facts in front of you at the time.

    I for one am not worried about the Chinese production. The new JV has to produce all new, Chinese market only cars under a different brand name for a period of time before they can start producing existing JLR products under license and there is so much demand for western cars in China that they will have their hands full supplying the domestic market. JLR will surely have put in place protections to stop Chery ripping off their IP and more over I doubt Chery (a struggling company by all accounts prior to this deal) would risk their potentially very profitable JV by doing anything silly. More likely is that Chery will inherit older JLR models as they are replaced here in Western markets with JLR’s blessing and a tidy commission on each one for the coffers. Expect to see the old Range Rover and eventually the Freelander 2 and Disco 4 live on in China long after they have been replaced here.

  17. Andrew M

    If Jaguar was owned by the Lyons family still, would you still be worried? After all, what’s the difference between this and the operations BMC had in Seneffe, S Africa, Australia etc? In reality, the Chinese domestic market is growing massively, and by manufacturing there, JLR can better compete with BMW, Audi etc who are all making cars for the Chinese market there and making massive profits. With no affect on German employment.

    Actually, production of the Rapide has moved back to Gaydon, thanks to the sales slump, it was only subcontracted out due to lack of capacity. I believe the Flying Spur was only temporarily made in Dresden due to capacity issues at Crewe.
    The MINI Countryman would no doubt be made in Cowley as well,except BAE flogged most of the site off so there’s no room!

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