Jaguar Land Rover to land in Changshu, Jiangsu province with Chery

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According to media reports from auto.163.com, who are in turn quoting a realtor that has been helping JLR officials find suitable housing the in the Changshu area, Changshu city has become the staging area for JLR in China.

Changshu has become quite the hub of automotive manufacturing over the past few years, the sleepy Jiangsu city has boomed thanks to its proximity to Shanghai and influx of foreign capital, many automotive companies have set up their parts production or research in the city. Qoros, a brand built between Chery and Israeli Corp, are also based in Changshu and will make for interesting bed fellows with JLR.

According to the rumor mill, the joint venture between Chery and JLR has already been decided and it is currently waiting for governmental approval before it can go forward, it is believed that the joint venture will first focus on producing Land Rover vehicles whilst Jaguar models will remain as imported cars. The Land Rover project apparently includes an engine production facility, R&D center and also a major part of the project will be a new brand built between Chery and JLR.

JLR have talked with multiple partners in the Chinese market, originally they talked with Great Wall and Geely. An annoymous person within Great Wall mentioned that JLR were basically looking for a company to carry out production in the Chinese market and were not entirely interested in forming  a joint venture and technology shares. Chery became the second choice for JLR but after talks that lasted two years it emerged that JLR were finally giving in on the technology share issue owing to the more stringent market entry requirements from the Chinese government.

The Chinese SUV market grew by 30% in 2011 and by 2020 it is expected that 22% of the world’s luxury car sales will be made in China. JLR delivered 42,000 units in China in 2011 of which some 37,000 units were Land Rover vehicles, showing there is a stronger demand for SUV’s than the big luxury cats. China is now Land Rover’s second largest market after the UK and is expected to become the biggest market in 2013.

Chery has several failed attempts at netting joint venture partners, its earliest with Chrysler ended prematurely with no products being taken to the market. The Chery A1 was initially expected to be rebranded as a Dodge for South American markets, but no models were made and Chery entered the South American market itself with good results. Later Chery would attempt to woo Fiat into its embrace but ultimately this failed before a deal was made – the reasons for the collapse in talks was never revealed. Chery’s most recent JV encounter took it to Subaru where the Japanese company hoped to make Subaru cars in Dalian, however the Chinese government pulled the plug on the project owing to Toyota’s 16% ownership of Fujitsu Heavy Industries, Subaru’s parent company.