News : JLR and Chery announce proposed JV

Carole Nash Classic Insurance Specialists

Jaguar XJ is the pinnacle of JLR's range, but could an entry level car built with Chery in China be branded simply, 'Rover'?
Jaguar XJ is the pinnacle of JLR's range, but could an entry level car built with Chery in China be branded simply, 'Rover'?

Jaguar Land Rover (JLR) and Chery Automobile Company Limited have reached agreement on a proposed joint venture in China.

The agreement follows extensive talks between JLR and Chery on establishing an equal partnership company. The scope of the proposed joint venture (JV) would include manufacture of JLR- and JV-branded vehicles; establishment of a research and development facility; engine manufacture; and sale of vehicles produced by the JV company.

JLR and Chery will now follow the official process to establish a joint venture company in China.

In a joint statement, Dr Ralf Speth, JLR Chief Executive Officer, and Mr Yin Tongyao, Chairman and Chief Executive Officer of Chery Automobile Company Ltd, said:

‘Working together on this proposed joint venture is an exciting prospect for both JLR and Chery. Demand for Jaguar and Land Rover vehicles continues to increase significantly in China and we believe that JLR and Chery can jointly realise the potential of these iconic brands in the world’s largest car market.

‘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.’

Terms and conditions of the commercial agreement are not being disclosed at this time and as such, no further details are available.

[Source: Jaguar Land Rover]

Clive Goldthorp

Clive claims that his interest in the BMC>MG story dates back to his childhood in the 1960s when the family’s garage premises were leased to a tenant with an Austin agency. However, back in the 1920s and 1930s, his grandmother was one of the country’s first female Garage Proprietors so cars probably run in his genes! Admits to affairs with Alfa Romeos, but has more recently owned an 06/06 MG TF 135 and then a 15/64 MG3 Style… Clive, who was AROnline’s News Editor for nearly four years, stood down from that role in order to devote more time to various Motor Racing projects but still contributes articles on as regular basis as his other commitments permit.

32 Comments

  1. JLR becoming a major global brand. Is there anything in the agreement to share intellecual propoerty I wonder? Or whether it can be avoided, whether it’s in the agreement or not.

  2. Why are so many hell-bent on using a Rover name? It’s not going to happen, enjoy the fact that Jaguar and Rover’s spin-off, Land Rover are doing so well.

  3. “… manufacture of JLR- and JV-branded vehicles; establishment of a research and development facility; engine manufacture …”

    Surely we can learn from the demise of MG Rover and Saab? JLR workers should be deeply worried about this JV, as it openly states they want Chinese manufacture, which means the one growing car market won’t result in growth in jobs in JLR’x existing factories.

    Oh, and R&D in China? Why not just hand them all your IPR now? Can no car maker execs grasp that China is engaged in a huge upskilling of their car manufacturers via JVs, and once they are up to speed, don’t expect the favour to be returned.

    Exactly what Honda did to MG Rover…. (recall Honda were small car makers only ’til they learnt off BL)

  4. No:8 If I Recal Honda were a willing partner with Rover Group. Rover benefitted massively from the techincal input. Their biggest sellers for the period were Honda products.
    The dumped their 20% ownership of Rover when BAE Snubbed them and sold the rest to BMW.

  5. @marcelfromholland

    The chinese pronounciation of “Rover” is “Roewe”… Oftewel, ze waren je voor 😉

  6. Sorry for being totally off pat but that picture shows whats wrong with the XJ – sleek feline lights against a bloody great big bluff grill that looks like its a fire box at a foundry!

  7. Oh Lordy Lord, the model next to the XJ is quite something. I’ll omit the usual crass double-entendres for now…. just “Wow !!”

    Anyway, back to cars. Re. China JVs (joint venture). It’s do or die. The only way to get cars into China competitively is through a JV. The Chinese Govnmt taxes imports to the moon & back otherwise (5.0 V8 XJ circa £200k) Audi are the leaders in this and have been building their cars in China for sometime. Merc & BMW already have a lead on JLR in being in China. JLR are following a trodden path and, fortunately for them, the two marquues (J & LR) are very much in vogue (pun?) there and so super luxury, high-end cars are selling very well.

    China is likely to soon be Jaguar’s largest market, being bigger than all other markets combined. Ignoring China will mean the vehicle lines will lack R&D funds to keep up with the Joneses re. CO2, performance, styling refreshes and technology updates.

    As I intimated earlier, there is little room for stary-eyed sentiment for the wishes of oily-types in Britain servicing their Marinas & Allegros; this is about aiming to be world leaders in vehicle capability & desirability.

  8. It would be useful for JLR to develop another brand to slot in under the two focusing on smaller, greener cars. Try as they might the total JLR range is still high on CO2 and that’s not going to be an easy problem to fix when you start looking at the rules coming in which will look at range average.

    Should it be badged Rover, no. It means nothing to the likely market in China. It’s almost as daft as Nissan revitalising the Datsun name which I hear they are planning.

  9. @ dolomitefan:

    “Should it be badged Rover, no. It means nothing to the likely market in China.”

    You could say the same thing about MG when the Chinese starting building them there in 2007 or Roewe which they created from scratch.

    Perhaps that would be the potential appeal of using the Rover brand in China on Jaguar Land Rover designed vehicles – Chinese buyers would have little knowledge of the baggage the name carried in its latter years in the UK, but as a European brand depicting luxury it could have potential appeal.

  10. As DeLorean’s Accountant says, the benefits to Jaguar Land Rover (JLR) from this joint venture are enormous. After all JLR is investing heavily in new models and engines and has recently got its cost base down to a more realistic level.

    The potential to supply Jaguars and Land Rovers in a CKD form and also have some of their engines built locally as part of this JV will have further benefits to JLR in reducing their cost base even further and increasing their revenue too.

    As JLR publicly said several years ago, they would continue to work with other partners, particularly in the design of engines. The deal with Chery further reinforces this commitment.

    JLR may be on a role financially but remaining as an island that is not prepared to collaborate through joint ventures will quickly undo all the hard work put in over the last five years. It is, after all, a joint venture, not a partial sell out to the devil.

  11. erm….. about two weeks ago I made a submission to Keith Adams regarding the “relaunch” of Rover as a domestic Chinese brand however, having read the T&C’s of any JV with a foreign manufacturer it is clearly stated that any domestic brand is just that – a “domestic” brand. Does that prohibit export of the domestic brand outside of China? If not then it would be an ideal solution to bringing Rover back to our shores (fingers crossed)

  12. @ dolomitefan
    JLR,as with all OEMs, are well aware of CO2 reduction requirements. The RR Evoque is the first example of downsizing. I’m not sure what JLR have officially stated but the magazines all talk of a new smaller Jag.

    I do understand that it takes a lot of resource to support a brand, what with marketing it, supporting it through dealers and registering/protecting it in each segment.

    Incidentally, I’ve owned:
    Toledo
    Dolomite
    2500PI
    Rover 2600 VP

    and would have them all again if I had the space… next to about 8 Jags 🙂

  13. I think this co2 stuff is all rubbish, why cant they just make good reliable cars, and save on production wastage. othr than that, JLR have no choice but to go with China otherwise they will be uncompetitive. hopefully they will not only increase their market share but also their profits. I wish them well, some of yez are right it does open the door for a smaller car to be produced at an ecomonic price, one of the problems with building a new Rover is that it DOES need to be a small to mid sized car…but its problably not economic to do it all in Britain. alex

  14. Of course it won’t, especially with such high inflation in China. Although I take everything economists say with a pinch of salt (or rather a Pacific Ocean-load of it), they say that Chinese inflation will cause the next global recession.

  15. As far as I can assertain, Jaguar and LandRover are in better shape than they have ever been. There are bunch of very intelligent, very savvy people steering the company to sustained expansion. Tata, to all their credit, are using the UK as JLR’s HQ, D&D and main manufacturing site. Other opportunites to build in other countries is nothing to worry about. BMW & Merc have been doing it for years & years. I even think that Land Rovers have been assembled abroad as CKD kits for many, many years but it was never really mentioned.

    In the current vehicle market, standing still is going backwards.

    I believe it is unfounded to worry about production going abroad; MINI, Honda, Nissan, Toyota, Bentley & RR are all foreign-owned UK manufacturers.

  16. “Why are so many hell-bent on using a Rover name? It’s not going to happen, enjoy the fact that Jaguar and Rover’s spin-off, Land Rover are doing so well.”

    Exactly, why would JLR cheapen their premium Land-Rover name by building lower budget cars with Rover on them, they bought the Rover name to avoid anyone doing just that.

  17. “Exactly what Honda did to MG Rover…. (recall Honda were small car makers only ’til they learnt off BL)”

    And BL were only making cars that fell apart until they learned from Honda.

    Don’t forget Rover’s biggest ever selling car the R8 was a fruit of the Honda/BL joint venture. About half the Rover’s on the road were running around with Honda designed gear boxes.

    It was one of the more successful joint ventures in the car industry it’s just a shame BAe just went for hard cash from BMW rather than look for a solid future for the company.

  18. “Life after death for the land rover then?”

    I think there is a good chance the Defender will go into production out there, where it doesn’t have to meet such strict safety legislation. So it may well live on after JLR replace it in the UK. Imagine if the vast Chinese army put in an order for them….

    I’m not sure what all the rest of the fuss it about though, stealing British jobs and all that, it’s only the same as VAG, Mercedes and others have been doing for years.

  19. I get the impression from reading some of the latest comments concerning the Rover name that no-one actually understands the potential to re-use it and they are based on simply the perceptions of the brand in the UK only.

    I agree that the Jaguar brand is finally delivering some inspiring and well built cars after making a consistent loss for 20 years. But does this mean that Jaguar Land Rover (JLR) necessarily wants to emulate the exact same strategy for the brand as already instigated by its German rivals? In other words, competing with them at every level and in every market sector? Perhaps taking the Jaguar brand into the medium sector is taking the brand too far down market? Does Jaguar really want to be perceived as simply the English rival to the Germans, or is there a desire to retain an aire of exclusivity by not competing in every sector of the market, thus reinforcing more of the individuality (and possibly desirability) of the Jaguar product? We saw the downside of ‘chasing the Germans’ with the X-Type which did little for the kudos of the Jaguar name.

    Who is to say that very active expansion of premium brands into lower market sectors will ultimately have long term benefits in terms of sustained levels of desirability and kudos associated with that brand? That is a question few critics have looked to address. Perhaps JLR have actively considered the prospect?

    Building models that compete in the Medium and possibly Compact Executve market sector using the Rover name would enable the Jaguar brand to retain an aire of individuality over its German rivals.

    As for “JLR cheapening their premium Land Rover name by building lower budget car with Rover on them”, this is based more on lay prejudice than an empirical business case study. This isn’t about badge-engineering as we saw during the BL days and beyond, but a potential opportunity to develop new models to compete in market sectors where it would not be desirable (for brand perceptual reasons rather than simple commercial opportunities) for the management of the Jaguar and Land Rover brands.

    With a well designed, engineered and inspiring product that consumers actually want to buy, backed up with effective brand management, aspirational marketing strategies and good customer service, there is no reason why the Rover name could not be re-used in market sectors that do not currently attract coverage from either the Land Rover or Jaguar brands. Most of the sentiments towards the Rover name are based purely on the perceptions of badge snobbery British buyers, not the potential opportunities that lie outside of “these four walls” in market territories such as Switzerland, Italy, Spain and Sweden (to name but a few) where the Rover brand was actually well liked and respected.

    Certainly the joint venture with Chery may well offer potential opportunities for Jaguar Land Rover to actively consider the appropriateness of having a third brand in active use.

  20. All the others are doing it so I suppose JLR must but please don’t give them any R&D input. Place I work has a Chinese plant with R&D and the results are unbelievably awful.Plus the knbowledge transfer generally outside the company.

  21. I really can’t see Rover returning. Why couldn’t or shouldn’t Jaguar & Land Rover/Range Rover use their own brands to explore new vehicle segments? I don’t think for a minute it’ll cheapen the brands; you can buy a Mercedes Benz minibus, coach or van yet the S Class is still seen as one of the best cars in the world.

    I don’t think many posting here for a Rover return understand the baggage associated with supporting an additional brand. As I said earlier, even Daimler has been been out of use for some time now.

    The reason X-Type failed was becuase it was a retro-looking car aimed at much younger buyers and was percieved to be a top-hat of 2 cut ‘n shut Mondeo platforms; it wasn’t.

    “…there is no reason why the Rover name could not be re-used in market sectors that do not currently attract coverage from either the Land Rover or Jaguar brands.”
    and what markets are they then? Rover failed mopre than once in the US and withdrew there.

    There are three brands in active use already: Jaguar, Land Rover & now Range Rover.

  22. @ DeLorean’s Accountant:

    Apologies in advance for the brevity of my reply.

    Paragraph 4 of your comments in relation to my comments of 25th March (in Paragraph 6). My comments in this sentence related to market sectors. Reference to market territories was in the follow-on sentence, although I did not make reference to the United States.

    Range Rover was always considered a sub-brand of Land Rover Ltd rather than a marque in its own right, despite it having its own elevated appeal and distinctive design language. However, this original objective has evolved in recent years now that Range Rover is represented by three ranges, although I note that the Land Rover oval still appears on the grille of the Range Rover and Range Rover Sport and also on the tailgate of the Evoque.

    You could argue that the strategy for Range Rover is similar to the one adopted by Mitsubishi in a number of market territories (and sectors!) whereby they apply the ‘Shogun’ name to three SUV models from the ‘traditional’ Shogun, right down to the Shogun Pinnin.

  23. Much of the “Why would anyone use the Rover name” diatribe here relates only to the bad times. There can have been fewer brands with lower image than Skoda when VW took them on, and yet no-one considers them good for a laugh any more.

    Even VW themselves were something of an anachromism prior to the mark 1 Golf.

    Although the cars discussed here are probably aimed upmarket of Skoda and possibly VW, I don’t believe that even in its darkest ours Rover and it predecessors made anything remotely as bad as an Estelle. Proof enough that with the right marketing, discarded and discredited brands can have a future?

  24. ‘The chinese pronounciation of “Rover” is “Roewe”.’ This would phontically mean that two brands of car were sold with the same name which would be confusing for those in China not familiar with the former brand.

    Maybe a CKD export of “Rovers” to the UK would work. This would create some, if not many, jobs over here & the product may be a success depending on the brand value of Rovers over here. I’m afraid people over here may think of Rovers as aging cars sold by a dodgy company.

  25. @ mark pitchford – agree entirely, neither do Austin or Morris mind. For when it was Allegro/Marina years, there were too mant detractors -Red Robbo, count yourself as one of these. Then when Top Gear starts, well grand piano death is wrong. And how? On a Marina, as often as I watch it ill not be funny. Small Rovers were fine, as in the 200 sedan, although no reason not to. Along.

    In short both were manufacturers of fine cars, Princess and Minor, so all dectraction should by now cease. How so, as Mark says Skoda. From Estelle to Superb, shame that VW did not want Rover or MG. SEAT for the 2010s.

    Comments?

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