Jaguar possibly planning sub brand with Chery

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If you want to make cars in China you have to give a little both ways, it is not as straight forward as ten years ago when you could announce that you had a local partner and begin making cars, now the government wants to see some hard up investment in China to secure long term investment by foreign companies. Chery and Subaru’s proposed joint venture hit a snag in November when the National Development and Reform Commission announced that as Toyota owns 16% of Fujitsu Heavy Industries (Subaru’s parent company) then the deal could not go forward, however it could go forward if Subaru’s cars were rebranded as Chery’s for China, the NDRC liked this idea. Jaguar and Chery have also been talking about joint ventures in China, it appears that JLR are pushing to get the joint venture through the rubber stamp committee on its first go. Reuters has a short report on what is actually a big story in the Chinese automotive world today, Jaguar are planning to work with Chery on developing a new sub brand:

Jaguar Land Rover Plc (JLR) has agreed in principle with China’s Chery Automobile to develop a luxury car based on its Jaguar models that may carry a Chery or a new marque in order to win Chinese government approval for a manufacturing venture, a Chinese newspaper reported on Wednesday.

Britain-based JLR, a subsidiary of India’s Tata Motors Ltd , had previously explored cooperations with Chinese partners, including Great Wall Motor Co Ltd , but made little headway.

“The National Development and Reform Commission (NDRC) made it very clear that in order to get approval for the project to go ahead, the two sides must have substantial cooperation, not just adding new capacity,” the 21st Century Business Herold said, citing an unnamed source.

The NDRC has the power to approve or block major foreign joint venture projects.

A proposed tie-up between Chery and Fuji Heavy Industries Ltd to make Subaru vehicles in China hit regulatory snags because the deal was ruled to lack substance, according to the source.

The newspaper said a car co-developed by JLR and Chery would carry either a Chery logo or a joint venture logo and the two sides might also collaborate on green vehicles.

Chery and JLR executives could not immediately be reached for comment.

Looking back, it is worth remembering that the recently announced Qoros brand has also just been announced by Chery which itself is aiming to be a premium brand, so are Chery planning to have some sort of internal premium brand battle with multiple brands, Qoros, A new JLR brand and of course its own Riich brand.