A Joint Venture By Jaguar Land Rover And Cheryl Automobile

Chinese government has given a green signal to the joint venture between Tata owned Jaguar Land Rover (JLR) of India and the Chinese company Cheryl Automobile. Both the companies are planning to manufacture a luxury car for China. Official media reports have confirmed the status of the approval from the Chinese government this Monday.

The action from the Chinese government comes after the approval of the mission of the joint venture by the State planner, and the National Development and Reform Commission. However, the companies took the business initiative long back, and even both the car manufacturers had announced their willingness to enter into a partnership to produce a luxury car at least seven months earlier. The joint venture between Tata Motors and Cheryl Automobile was announced in the month of March 2012.

The deal between the two motor vehicle manufacturing giants has been reported to be worth of 12 billion Yuan (1.89 billion US dollars). It is also being reported that the zeal to enter into the joint venture and start manufacturing the luxury cars was so strong between both the companies that special measures were initiated and the official procedure was completed within almost half the duration of time that the Chinese Government usually takes in approving such business associations.

The venture will lead Tata Motors to set up an advanced state-of-the-art facility for Research and Development (R&D) in the hinterland of China. The company is also ready to establish an excellent unit of production in Jiangsu state, which is situated in the eastern city of Changshu.

Both the companies are very eager to start their work as soon as possible and they have already started to move forward to clear the protocols involved at the initial stages of the venture, as fast as they can. The manufacturing unit in China is scheduled to become operational within the coming year and the companies are said to be producing about one thousand and thirty lacs units of the luxury car every year.

While Tata Motors is the leading heavy vehicles manufacturers of India and has even emerged as one of the strong competitors in the world market, Cheryl Automobiles makes passenger cars along with utility vehicles and engines and is the leading automobile exporters of China.

The Xinhua news agency reported that the manufacturing unit of China would produce the luxury cars of Jaguar and Land Rover, along with several other co-branded luxury cars. Both the companies have a very high expectation from the partnership on noticing the recent trend of the car market of the country. Sale of Jaguar Land Rover in the mainland of China has peaked to about 80 per cent more than that of the last year, giving a hint of the nature of prevailing market for the luxury cars in China. The news agency, Xinhua quoted these figures of the sales of the branded car getting information from the China Association of Automobile Manufacturers.

Tata Motors is really looking at the venture with a lot of prospect for future business deals with the country. The company is even considering to increase its percentage of investment in its subsidiaries gradually.

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