Jaguar Land Rover (JLR) announced on Wednesday that it had finalized an agreement with Chery Automobile to manufacture and sell luxury vehicles in China.
Both firms will hold an equal stake in the venture, which will also make co-branded vehicles, according to a joint statement on the Jaguar Land Rover website.
"Working together on this proposed joint venture is an exciting prospect for both JLR and Chery," Ralf Speth, JLR chief executive, and Yin Tongyao, chairman of Chery Automobile Co. Ltd., said.
"Demand for Jaguar and Land Rover vehicles continues to increase significantly in China. We believe that JLR and Chery can jointly realize the potential of these iconic brands in the world's largest car market."
The deal comes as a boost for JLR, now owned by India's Tata Motors (IW1000/185), at a time when its sales in Europe remain weak due to the current economic uncertainty.
The joint venture company will set up a research and development facility, a plant to manufacture engines, and it will look after vehicle sales as well.
Tata Motors, which makes the world's cheapest car, the Nano, bought Jaguar and Land Rover from Ford Motor Co in 2008 for $2.3 billion as part of its plans to expand beyond Asia.
Tata Motors officials have said there are plans to double its investments in JLR to 1.5 billion pounds a year, starting in the new financial year, to help launch new products and technologies.
In recent years India and China have emerged as key markets for global automakers, as car sales in most developed countries have slumped due to economic turmoil.
Chery, which makes passenger cars, utility vehicles and engines, is one of China's largest automobile makers, with exports to over 60 countries.
Copyright Agence France-Presse, 2012
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