First out of the gate today was news that the Chinese government had, finally, officially approved the Chery joint venture with Tata Motors’ Jaguar Land Rover that will see Freelanders built in China from 2014, when a redesigned model is due, followed by the Evoque and Jaguars.
Meanwhile, after much discussion, and bureaucratic tweaking of the new auto industry plan, it looks like the Brazilian government’s proposals finally made for a good enough business plan for BMW to proceed with an assembly plant there.
I reckon it’s been quite a few years since Jaguars were last assembled overseas. When the brand was part of the then sprawling British Leyland empire (on which the sun literally never set), I remember them being knocked up from CKD kits in my native New Zealand in the mid to late 1970s and, along with the Rover 3500, shipped to Australia under a free trade agreement. The Jag XJ6 was also assembled from kits by Leyland South Africa.
This new deal with China will have roughly the same effect as it did back in the day in the Antipodes and Africa – avoiding high taxes levied on fully imported cars. China was JLR ‘s third largest market in the second quarter.
As Chery said today, Jaguar will gain their knowledge of, and distribution channels in the tier three and four cities, now the focus of automakers there as the tier one and two markets approach saturation, and Chery gets technology, manufacturing expertise and a shiny new factory in which some of its vehicles can be made alongside the Jags and Land Rovers. Jaguar will also be able to make China-only models such as the three-litre XJ announced earlier this year locally, reducing model-mix complexity at its UK plants.
Details of BMW’s plans for Brazil are still sketchy as some horse-trading with the government has still to take place but, once agreement on taxation levels, local content and other issues are sorted out, it looks like BMW will take a similar approach to its production start in India – and with Brilliance in China for that matter – begin with knocked-down kit assembly and gradually increase ‘localisation’ – adding panel pressing and engine manufacture – as volumes rise. Given the infrastructure and well established supplier base in Brazil, achieving whatever level of local content the government wants in exchange for favourable taxation levels should not be too difficult.
Another intriguing story today suggested that Fiat –built cars could again be US-bound and that the Fiat platform-based Dodge Dart could also be built in Italy, presumably for European sales; a Fiat version is destined for Chinese build and sale as well. We’ll know more when Fiat’s new plan for Italy is announced on 30 October.
In other news, Johnson Controls auto battery unit swooped on bankrupt A123Systems’ automotive assets, opening up more opportunity in the EV market, GM Europe’s Opel unit announced the first of a new family of petrol engines, UK racing engine maker Cosworth (remember their Ford Sierra?) reportedly is up for sale, Ford Europe dropped the one-litre EcoBoost I3 into the C-MAX, there was speculation Opel/Vauxhall and Peugeot-Citroen could get closer and I got to meet Chevrolet UK’s new chief.
Have a nice weekend.
Graeme Roberts, Deputy Editor, just-auto.com