Hot News: Jaguar - Land Rover to Make Cars with Chery?

JLR themselves mentioned a while ago that they were looking to produce cars locally in the Chinese market to combat their Germanic luxury rivals, of course this fired up the rumor mill with many people pointing to local manufacturers such as Chery and Great Wall as potential bed mates for the British owned car company. When we pressed Great Wall officials several months regarding the talks with JLR a toothy grin appeared and told us ‘just so-so’ which gave us a strong impression that GWM maybe the winners here, but China Business Review is reporting via Reuters that JLR are planning to tie up with Chery Auto.

Chery previously tried to ink a deal with Subaru to set up a joint venture in the port city of Dalian which is strategically close to Japan, but the Chinese regulatory authorities killed the deal without much haste on account that Toyota owns 16% of Subaru’s parent company Fuji Heavy Industries which goes against the rules which state that foreign manufacturers can have a maximum of two partners in the Chinese market, with Toyota of course having two partners at Guangzhou Auto and First Automobile Works. At the time it was seen that government were clearly worried about over capacity and were eager to deny any other foreign manufacturer from setting up local production, the Chang’an-PSA joint venture took the best part of two years to gain approval from the NDRC and was only approved when PSA offered to give a certain amount of technology to its new partners.

So could JLR gain access to the Chinese market? They would no doubt have to sign over a certain amount of technology or even have to set up a local sub brand with Chery, but remember that Chery has also signed a deal with Quantum LLC to develop a new range of cars for Europe and North America, the new brand will be called Qoros and should see its model line up shown in November this year. If the government are keen to crack down on overcapacity, JLR could potentially get the cold shoulder from the NDRC unless of course they are willing to make some sacrifices, also inter-governmental relations always play a strong part in joint venture negotiations, whilst Anglo-Chinese relations have been strong over the past 12 months will they be strong enough to seal a deal?

Thanks to: China Car Times