Britain's Indian-owned iconic car company is set to spend 3.5bn yuan for a 30 year agreement with Chinese automaker Chery.
The one millionth Land Rover Discovery leaves the production line Image: Land Rover |
After much speculation, Tata Motors Ltd's Jaguar Land Rover luxury unit will spend 3.5 billion yuan ($533 million) for a 50% share in a planned joint venture with Chery Automobile Co. The venture, which will last for three decades unless terminated or extended, will build the UK carmaker's models in China.
Demand for luxury cars in China continues to skyrocket, resulting in record third-quarter profits for Tata Motors, whose net income rose 41% to $665 million (4.2 billion). Sales of Jaguar and Land Rover rose 37% to 86,322 units in Q3, with Jaguar more than quadrupling its deliveries in China.
Although the new joint venture could create hundreds of jobs and new business opportunities, the project will still need government approval before it can go ahead. Newly introduced protectionist policies from Beijing will make it harder for foreign companies to invest in China, as the worlds largest automarket endeavours to grow its domestic sector.