HEFEI, CHINA (NNN-XINHUA) -- Leading Chinese automobile manufacturere Chery Automobile Co. Ltd. and Indian-owned luxury car maker Jaguar Land Rover (JLR) say they have reached agreement to set up a joint venture (JV) in China in which both sides will hold equal shares.

According to a press release posted on Chery's official website and also seen on JLR's official website, the agreement follows extensive talks between JLR and Chery on establishing an equal partnership company.

The scope of the proposed joint venture will include the manufacture of JLR- and JV-branded vehicles, the establishment of a research and development (R&D) facility, engine manufacturing and the sale of vehicles produced by the joint venture, the release 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 realize the potential of these iconic brands in the world's largest car market," said JLR chief executive officer Ralf Speth and Chery's Board Chairman and General Manager, Yin Tongyue, in a joint statement.

"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," the statement said.

The terms and conditions of the commercial agreement are not being disclosed for now.

Chery was founded in 1997 and has since emerged as one of China's largest and most productive automotive manufacturers. Chery is also one of China's largest vehicle exporters, sending vehicles to markets in over 60 countries.

Chery's products include passenger cars and SUVs, as well as engines and transmissions. In 2011, Chery recorded sales of 643,000 units, ranking sixth among China's passenger vehicle manufacturers.

JLR, a wholly-owned subsidiary of India's Tata Motors, is the largest manufacturer of premium vehicles in Britain.

In 2005, sales in China accounted for one percent of combined Jaguar and Land Rover sales. The country is now JLR's third largest market and is still growing; annual sales in 2011 increased by 60 per cent to 42,000 units. -- NNN-XINHUA

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