Jaguar Land Rover (JLR) is looking to increase its stake into the worlds largest automotive market by way of a $2.87 billion joint venture with Chery Automobile.
With BMW, Mercedes-Benz and Audi all having local manufacturing facilities within China, JLR is playing catch up and trying join the club. Last year, JLR sold 42,000 cars in China, a pittance when compared to Audi’s 313,000 sold. With the Chinese luxury automotive market still on the rise, the need for localized manufacturing is increasing and will no doubt help to boost JLR’s sales numbers.
The issue that now exists however, is the Chinese government has been less than accommodating lately when it comes to foreign investment in its automotive industry. Fuji Heavy Industries proposed a joint venture also with Chery Automobile to build Subaru’s in China last year, and has still yet to be informed by the government whether or not the venture will get the go ahead.
“It’s hard to second guess whether the JLR deal would get the green light. But one thing is obvious, it’s getting harder and harder for foreign automakers to get joint venture deal in China,” said John Zeng, the director for industry consultancy LMC Automotive Asia Pacific region.
