Tata Motors-owned Jaguar Land Rover's (JLR) proposed joint venture with Chinese automaker Chery Auto has been approved by the country's National Development and Reform Commission.
Quoting Chery Auto, Chinese official news agency Xinhua today said the approval came about six months after the company had announced the 12-billion-yuan (USD 1.89 billion) venture with JLR in March, although most similar joint ventures normally take a year to get approval.
"The process was short because Chery was familiar with the approval procedure and did not waste time," the agency said quoting a spokesman of Chery Auto.
The joint venture's new automobile plant, located in the city of Changshu near Shanghai, is expected to have an assembly line, an engine factory and a research centre.
As per the agreement between the two partners, the plant will have a capacity of 1,30,000 units a year -- mostly Land Rover and Jaguar vehicles, but also joint venture brands. It is scheduled to be operational in 2014, the report said.
China is one of the biggest markets for JLR and sales reached 53,000 units in the first nine months of the year, up 80 per cent from a year earlier, according to the China Association of Automobile Manufacturers, the report said.
On the other hand, Chery, which has been successful in the domestic low-end market, saw its sales drop by 11.5 per cent to 4,12,500 units in the first nine months of the year, it added.
In the passenger vehicle sector, the SUV segment remained the fastest growing segment with sales up 24.46 per cent to 1, 64,300 vehicles, according to China Automotive Review.