After years and years and years of rumors and premature announcements, Jaguar Land Rover (JLR) has finally, honestly, cross your heart and swear to fry, “finalized a joint venture agreement with Chery Automobile Co to manufacture and sell vehicles in China,” Reuters reports.
The never-ending story however is just beginning. As Reuters rightly points out, “JLR, owned by India’s Tata Motors (TAMO.NS), and Chery are seeking regulatory approval for the 17.5 billion yuan ($2.78 billion) venture in eastern China.”
That regulatory approval never was easy, and now it is harder than it used to be. The fact that Chery is an independent maker and (at least not officially) tied to some government, won’t make the matter easier.
Chery has some experience with that. Previously, the maker of QQs had tried to forge a joint venture agreement with Japan’s Subaru. That had been turned down. Fuji Heavy was told the application was denied because Subaru “is an affiliate of Toyota Motor Corp.” Toyota already has two joint ventures in China, and a company can’t have more than two. Or so the tortured reasoning went.
Knowing this, JLR and Chery wisely put a Chinese research and development facility into their business plan. China has enough carmaking capacity. China wants more know-how.