Chery, Jaguar Land Rover Launch $1.7 Billion Venture

Chery Automobile Co. and Tata Motors Ltd.'s Jaguar Land Rover unit and have broken ground for their 10.9 billion yuan ($1.7 billion) joint venture in Changsu in Jiangsu Province.

The 50:50 partnership Chery Jaguar Land Rover Automotive Co. Ltd. includes an R&D center, assembly and engine plants and development of a new China-specific brand.

The partners plan to begin production at the complex near Shanghai in 2014 with annual capacity of 130,000 vehicles. JLR has said the first model will be Land Rover's Freelander or Range Rover Evoque compact SUV, followed by Jaguar cars and eventually by models for the unnamed new brand.

China is JLR's largest and fastest-growing market. Sales of the two boutique brands there soared 78% year over year in the first 10 months of 2012. Producing locally will allow JLR to avoid China's 25% tariff on imported vehicles.