The agreement follows extensive talks between JLR and Chery on establishing an equal partnership company. The scope of the proposed joint venture (JV) would include manufacture of JLR- and JV-branded vehicles; establishment of a research and development facility; engine manufacture; and sale of vehicles produced by the JV company.

JLR and Chery will now follow the official process to establish a joint venture company in China. 

In a joint statement, Dr Ralf Speth, JLR chief executive officer, and Mr Yin Tongyao, chairman and chief executive officer of Chery Automobile Company Ltd, said:'Working together on this proposed joint venture is an exciting prospect for both JLR and Chery. Demand for Jaguar and Land Rover vehicles continues to increase significantly in China and we believe that JLR and Chery can jointly realise the potential of these iconic brands in the world's largest car market.

'Our ambition is to leverage the respective strengths of our two businesses – in research and development; technological innovation; manufacturing excellence and local consumer knowledge- to offer Chinese customers the most advanced, highly efficient products featuring the very latest technologies.'

Terms and conditions of the commercial agreement are not being disclosed at this time and as such, no further details are available.