Jaguar Land Rover and Chery Automobile Co are seeking regulatory approval for a 17.5 billion yuan car venture in eastern China, two people with direct knowledge of the deal told Reuters on Monday.
The venture, to be located close to Shanghai in Changshu city, will make Land Rover SUVs initially, followed by Jaguars in the second phase, one person told Reuters.
"The plan is still subject to the approval of the National Development and Reform Commission at this state. The size of the investment could be adjusted accordingly," another person said.
The venture is also subject to approval from other government bodies.
Both sources declined to be named because of the sensitive nature of the proceedings.
JLR, controlled India's Tata Motors Ltd had previously explored joint venture deals with other Chinese partners, including Great Wall Motor Co Ltd.
A Tata Motor spokesman declined to comment on the Chery tie. Chery executives could not immediately be reached.