Chery Automobile is expected to gain from its joint venture with Jaguar Land Rover but it still wants to develop its own high-end brand though analysts are sceptical.
The South China Morning Post quotes one as saying that a company such as JLR would not be happy putting its best technology into a joint-venture brand.
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What is more likely is that Chery will develop an existing model with some luxury ‘tweaks’ and a new logo, similar to what other jvs have done in China.
As well as a new factory, Chery and JLR will also set up a research and development centre and an engine plant.
Chery has also announced an alliance with Guangzhou Automobile, a partner of Toyota and Honda, to share core technology and management experience. Analysts told the Morning Post that Chery’s strategy is to work with local and foreign partners to realise its plan to transform itself into an upmarket manufacturer – however such projects demand huge investments and are therefore a challenge for Chery, which has been short of cash.
The venture with JLR, which plans to produce the first batch of 130,000 vehicles in 2014, will lower the cost and the prices for Britain’s top luxury sedan and SUV brands in China which has become the biggest overseas market and the most important growth engine for the British company, now owned by India’s Tata Motors.
From January to October, JLR sold 53,186 cars in the country, up 81% from the same period last year.
