Chery Automobile announced on Friday (19 October) its joint venture with Tata Motors’ Jaguar Land Rover (JLR) had been officially approved by the Chinese government.

In September, the Chinese firm said it had received regulatory approval from the National Development and Reform Commission (NDRC) to form the CNY12.1bn joint venture but had “yet to receive the official notice from NDRC”.

The Chery-JLR venture will be based in Changshu city near Shanghai with an annual capacity of 130,000 cars. The partners will make Land Rover SUVs initially, followed by Jaguars in the second phase.

Earlier in the year, JLR and Chery had received the green light for the venture from China’s environment ministry.

Early in March 2012, Chery and JLR made a joint announcement on establishing a joint venture in China with an equal 50% stake. According to the plan, the joint venture would establish a vehicle plant, an engine plant and an R&D centre in Changshu, Jiangsu province, to manufacture JLR vehicles and JV brand vehicles and engines, and to sell JV-manufactured products.

A Chery statement today said “JLR’s brand influence and management experience” combined with Chery’s technology, R&D ability and local market knowledge would benefit both parties.

Chery’s large sales channels in China’s small and medium cities would help JLR “achieve its strategic goal in China as soon as possible”.

Ralf Speth, CEO of JLR, said the joint venture would create “a thrilling outlook for both Chery and JLR” and had “huge potential”.

The partners said Land Rover technologies would also be applied to Chery products to enhance quality and the brand and would have have a “positive impact on Chery’s overseas operations”.

Separately, China Auto Web said the JV would break ground on its production base in Changshu, Jiangsu, as soon as late this month.

The factory scheduled to open in July 2014, would make the Freelander (a redesigned model is due out that year, according to ‘s PLDB database) with about a third of the installed production capacity of 130,000 (43,000) allocated to the compact SUV. The joint venture’s long term plan is increase annual vehicle sales and production to 250,000 units.

The Evoque would also be assembled at an evential rate of 34,000 a year, along with some 30,000 Jaguars and 23,000 ‘local brand’ units.

The Chery-JLY Freelander 2 would be powered by two-litre TGDI engines also built in Changshu.

In the initial phase, the engine plant would make 125,000 TGDI and 5,000 V6 engines a year. The smaller, 1.6-litre TGDI may be added later as capacity rises.

JLR has so far signed up 125 dealers in China, 89 of them already operational, China Auto Web said.