Jaguar Land Rover are planning a major advance into the potentially vast automobile market of China. It has been announced that the prestigious manufacturing company has struck a deal worth £1 billion to become part of the largely untapped burgeoning economy of the Far Eastern country.
The deal is with the state-owned company, Chery Automobile. Chery was founded as recently as 1997 and in 2010, the company became the seventh largest automobile manufacturer based in China with sales of close to 700,000 – most of these were passenger cars.
Clearly this is a major result for West Midlands based JLR, and despite initial concerns in some quarters that they will eventually just pack up and move to China to save on manufacturing costs, this is actually likely to add security for the company’s UK workers.
In fact, officials at the company have already put nervous minds at rest by stating that this is not the start of a move away from UK shores, but an advance due to the fact that the company is on UK shores. For as much as Jaguar Land Rover are buying into the Chinese market, equally the Chinese will be buying into the prestigious name of Jaguar Land Rover – and part of that prestige is due to the fact that the company is a British company with a very British history.
Sales of JLR are up by a whopping 80% this year as the winds of change drift across the Chinese landscape. And for JLR, building vehicles in China for the Chinese will save the company having to pay import duty. All in all, it seems a wise and ambitious business decision.
It was actually way back in March of this year that Jaguar Land Rover agreed to invest the initial $2.78 billion for the establishment of a brand new research and development facility and the creation of a new marque designed specifically for the Chinese market, which is currently the third largest market for the company behind the US and the UK. A wise move then.
Chief Executive Dr Ralf Speth had already stated in September that along with engine builds, the new plant will also build either Freelander or Evoque. This will actually be the first time Jaguar Land Rover vehicles will have been built outside of the UK. Dr Speth also said that the likes of Range Rover and Range Rover Sport are “unlikely” to be built away from our shores.
So despite calming voices from the Tata-owned company, is there need for any long-term concern? Not according to Dr Speth: “we are increasing production, not to reduce in the UK, but using the UK base to grow around the world” he told the BBC in September.
So in an Autumn when Ford announced that they were to regrettably close two UK manufacturing plants resulting in the loss of up to 1,400 jobs in Southampton and Dagenham, the news that Jaguar Land Rover is going from strength to strength is some good news leading in to Christmas.
The new manufacturing plant is expected to begin production in Changshu around 2014.
Images from motoringchat.com, autoblog.com