JLR and Chery's new mode to foster electrification blueprint

British premium carmaker Jaguar Land Rover and its Chinese partner Chery are creating a new mode of cooperation by making the most of their respective advantages to enable their joint venture to explore China's robust new energy vehicle market.

According to their letter of intent inked last week, their joint venture Chery Jaguar Land Rover will roll out a new range of electric vehicles for car buyers in China, which is the world's largest market for such vehicles.

"This agreement empowers CJLR to explore the new opportunities for product development in the electrification era, to provide new and appealing choices to customers, in line with the strategic direction of JLR and Chery, our long-term and trusted JV partner," said Pan Qing, member of JLR's board of management, president and CEO of JLR in China.

Pan added that this strategic move represents complementary growth independent of Chery's existing portfolio and JLR's modern luxury House of Brands, heralding a new strategic phase for CJLR.

A total of 3.9 million pure electric vehicles and plug-in hybrids were sold in the first five months of this year in the country, up 32.5 percent year-on-year, according to the China Association of Automobile Manufacturers.

The CAAM statistics show that they accounted for 33.9 percent of total vehicle deliveries in the period, indicating that NEVs have become serious choices for car buyers.

The new deal between JLR and Chery came against this backdrop. The electric vehicles, which will be collaborative efforts between the Chery and JLR teams, are to be produced at CJLR's existing plant in Changshu, Jiangsu province, which is JLR's first manufacturing facility outside the United Kingdom.

The vehicles will be built based on Chery's EV architecture, exclusively under the Freelander brand licensed from JLR to the joint venture. JLR's Freelander brand was a Land Rover vehicle which was successfully produced between 1997 and 2015. It was succeeded by the Discovery Sport in 2016.

JLR said the EVs bearing the Freelander marque will be initially sold in China through a network independent of the company's current dealerships. These vehicles made at CJLR will be available over time in global markets as well, it added.

Analysts said the move is the starting point of a new strategic phase for the 12-year-old joint venture. Established in November 2012, the 50-50 joint venture is the country's first and only Sino-British premium automotive company.

Its Changshu plant, which began operation in 2014, is producing the Range Rover Evoque L, Discovery Sport, Jaguar XFL, Jaguar XEL, Jaguar E-PACE and engines for the Ingenium family.

The addition of new EVs will further improve the efficiency of its plant and build a more diverse portfolio for car buyers in the country which boasts an automotive industry leading in electrification globally.

JLR and Chery's new model of collaboration has been widely hailed, as it fully leverages both parents' strengths to create mutually beneficial prospects for the future in the increasingly competitive Chinese EV market, where local marques have an edge over international brands.

Chery, thanks to its focus on technology, now holds a leading position in China's rising NEV segment. In May, Chery sold 42,733 NEVs, up 279.3 percent year-on-year.

It marked the first month for the Anhui province-based carmaker to sell more than 40,000 NEVs, as it has been investing heavily and launching new products, in an attempt to catch up with BYD, China's No 1 NEV maker.

JLR, as the gem of the British auto industry, has unrivalled heritage and design expertise.

The company continued its trend of strong financial performance in the financial year. Revenues for the 12 months to 31 March 2024 were 29 billion pounds ($36.7 billion) — JLR's highest ever full year revenue and up 27 percent compared to the prior year.

With its open, innovative and future-oriented mindset, it is blazing a new trail by cooperating with its Chinese partner to co-create new energy products for the fast-evolving NEV market in the country.

This is in stark contrast to the mode commonly seen in the gasoline-vehicle age of introducing products from international brands into their Chinese joint ventures.

It may even set an example for automotive partnerships in the country to succeed in the era of NEVs.

"We believe that working together to develop new models of collaboration for the world's largest and fastest-growing EV market, combined with the appeal of the Freelander brand, promises a very exciting future for CJLR," said Adrian Mardell, JLR's chief executive officer.

He called the new deal with Chery an "important strategic step for JLR", saying it underlines the company's ongoing commitment to China and complements its existing business in the country.

Chery Group Chairman Yin Tongyue said their model of collaboration is "innovative" and explores a new growth path for the future.

"The blend of Chery's advanced EV technology with the distinctive appeal of the Freelander brand will undoubtedly provide China and global consumers with a unique electric vehicle experience," he added.

Globally, JLR aims to deliver a sustainable vision of modern luxury by design under its strategy called Reimagine. It is transforming its business, targeting carbon net zero across the supply chain, products and operations by 2039.

The company said electrification is central to this strategy. Before the end of the decade, the Range Rover, Discovery and Defender collections will each have a pure electric model, while Jaguar will be entirely electric.

lifusheng@chinadaily.com.cn