The British luxury car firm has agreed a £1 billion joint-venture deal with Chery Automobile Company, and will now begin the process of constructing a new plant at Changshu near Shanghai.
What does this mean for UK dealers? Well, nothing – except perhaps a barrage of questions from existing and potential owners. The bottom line is that JLR’s plants in the UK will not close down, and the new Chinese plants won’t be supplying us – only the Far East its self, where demand is currently outstripping supply.
A research and development centre and engine production facility will also built as part of the venture, with the main manufacturing plant expected to be completed during 2014.
A joint statement released by the Chinese and British companies said: ‘We are delighted to have reached this milestone, achieved thanks to the understanding and foresight of the Chinese authorities and we want to thank them for recognising the potential of our joint venture in the fast-growing Chinese market.
‘Together, we will now begin working in close collaboration on our partnership plans to harness the capabilities of our respective companies, to produce relevant, advanced models for Chinese consumers.’
Sales of Jaguars and Land Rover in China have risen by 80 per cent so far this year as the company looks to expand in the booming communist country. Sales were fuelled by strong demand for the Jaguar XF and XJ models and the Range Rover Evoque.
Mohan Sodhi, Professor of operations and supply chain management at Cass Business School is not surprised at the news but does have concerns, however.
‘With every other car manufacturer producing in China, Jaguar’s deal may not seem surprising. Yet the deal is not without risks,’ said Sodhi. Jaguar’s surge under Tata Motors ownership is quite possibly about the ‘Britishness’ of the car, something that Ratan Tata would have recognised as an asset when Tata acquired Jaguar from Ford.
‘A “British” car made in China is therefore a possible risk for business. And how do you sell a “British” car, made in China, in neighbouring India? Mitigating this risk however is the fact that China’s manufacturing is no longer connected with cheap and poor quality goods.’