Chinese government concerns about overcapacity may sink or delay Tata Motors-owned Jaguar Land Rover’s plans for local production, local media said.
The government previously nixed a Chery bid to tie up with Subaru maker Fuji Heavy Industries because Toyota owns 16% of Fuji which goes against the rules which state that foreign manufacturers can have a maximum of two partners in the Chinese market and Toyota already had two partners at Guangzhou Auto and First Automobile Works, China Car Times (CCT) noted.
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And it added: “At the time it was seen that government were clearly worried about over capacity and were eager to deny any other foreign manufacturer from setting up local production. The Chang’an-PSA joint venture took the best part of two years to gain approval from the NDRC and was only approved when PSA offered to give a certain amount of technology to its new partners.
“So could JLR gain access to the Chinese market? They would no doubt have to sign over a certain amount of technology or even have to set up a local sub brand with Chery”.
CCT also noted that Chery has also signed a deal with Quantum to develop a new range of cars for Europe and North America with the new Qoros brand set to unveil its model line up in November.
“If the government are keen to crack down on overcapacity, JLR could potentially get the cold shoulder from the NDRC unless of course they are willing to make some sacrifices,” CCT suggested. “Inter-governmental relations always play a strong part in joint venture negotiations, whilst Anglo-Chinese relations have been strong over the past 12 months will they be strong enough to seal a deal?”
At the start of the year the Chinese and British governments agreed a business deal that included a commitment to sell 40,000 extra JLR vehicles in China, British magazine Autocar reported earlier.
JLR remains silent on the issue for now, only reiterating its earlier statement on China.
