China's Ministry of Environmental Protection has approved luxury automaker Jaguar Land Rover's proposal to build a Chinese assembly plant. JLR, which is owned by India-based Tata Motors, had entered a joint venture last May with Chery Automobile to produce a 12 billion yuan ($1.9 billion) assembly plant in Changshu located in east China's Jiangsu province.
This factory is expected to build up to 130,000 vehicles annually. Since it has now complied with environmental requirements, the joint venture has to be approved by the National Reform and Development Commission, which is China's central economic agency. Since last year, there have already been reports about this deal.
It makes sense for JLR to focus in China, the largest auto market in the world, especially as the market for luxury sedans and SUVs continues to expand amid the decreasing trend in the overall market. JLR had been in talks with other Chinese companies such as Great Wall Motor about the possibility of joint venture deals but the talks had failed.
By having an assembly plant in China, Jaguar and Land Rover aim to challenge Audi, BMW and Mercedes, which lead China's luxury segment. In 2011, Land Rover sales in China rose by 68 percent to 34,993 units, while Jaguar sales surged 58 percent to 3,897 units, LMC Automotive declared. These vehicles were all imported.