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Jaguar Land Rover to form joint venture with China's Chery

In order to gain better access to the Chinese market, Jaguar Land Rover will be forming a joint venture with Chery.

Looking to expand its presence in the Chinese market, Tata Motors' Jaguar Land Rover luxury division will reportedly form a joint venture with China's Chery Automobile Co.

Deliveries of Jaguar Land Rover vehicles soared last year in China, but the company's overall growth potential is currently capped by pricey import taxes and fees. Entering into a joint venture with Chery will allow Jaguar and Land Rover to produce vehicles locally, sidestepping China's import duties.

Per Chinese law, foreign automakers must partner with a local brand if they wish to produce vehicles in the country.

"It's a smart move by Tata Motors," Juergen Maier, a fund manager at Raiffeisen Capital Management, told Bloomberg. "It makes sense for Tata to have local production in China as it helps reduce the prices as well as cater supply more closely to the Chinese demand."

Chery is China's sixth-largest automaker and has been producing vehicles since 1999.

An official announcement on the subject could be made at the Beijing Motor Show in April.