![]() JLR expects the market for luxury vehicle sales in China to double to more than 2.5m units by 2020.A Bumpy Ride: Brexit and the UK Auto Industry Audi, BMW and Mercedes-Benz collectively control about 80 per cent of the segment. JLR still has lots of work to do in China to build market share in the luxury car market which is already dominated by three leading German manufacturers. JLR's target consumer in China is a affluent middle class and upper class customer wanting to buy luxury vehicles. However, as this Sky News video illustrates, many Chinese consumers are happy to buy existing JLR models, shipping directly into China from the UK-based factories. A distribution agreement with Chery would extend this and would mean Chinese-made JLR vehicles could be sold through the Chery’s existing dealership network. The joint venture will allow it to maximise sales opportunities in the main urban areas. JLR currently has a network of around 150 dealers in most of the main and second-tier cities in China. This is a good example of the concept of localisation – changing a product or service to meet the specific needs of customers in a different geographic location.Ī key benefit of the joint venture with Chery is that JLR will have access to a much wider and well-established dealer network across China. JLR says that being in China will enable it to build vehicles designed specifically for the Chinese market. Other estimates suggest that the factory capacity may be extended in order for JLR to produce up to 200,000 cars per year. Initial estimates suggest production volumes at the Shanghai factory could be in the region of 130,000 vehicles a year, which would be similar to those JLR achieves in its UK factories. The Shanghai plant will be JLR’s first true manufacturing plant abroad, and will use Chinese parts.Ī research and development facility and engine production plant will also built as part of the venture, with the main manufacturing plant expected to be completed during 2014, with production starting the following year. You can learn more about JLR's joint venture with Chery here: JLR agreed a deal with Chery Automobile and will build a plant near Shanghai, which is due to open in 2015. In November 2012, JLR announced that it was to make vehicles in China for the first time after the Chinese Government approved a £1bn joint venture. The Chinese government enforces a 50 per cent foreign ownership limit in the car industry and also requires foreign-invested joint ventures to develop Chinese brands – such as GM’s popular Baojun sedan and the Zinoro, an electric vehicle developed by BMW’s China joint venture. To do this, it would need to have a joint venture partner (a requirement in China for the automobile sector). However, it must have been clear to JLR that to really succeed in China in the fast-growing luxury car market, it needed to be able to manufacture in China. JLR set up a wholly-owned National Sales Company (NSC) in July 2010 to establish, manage and grow its dealer network there. To establish a foothold in the Chinese market. High import tariffs means that the selling prices in the showrooms of Beijing, Shanghai and other Tier 1 and Tier 2 cities are almost twice the equivalent price in the UK for comparable models. ![]() This is a phenomenal success story and is a great illustration of how a brand can exploit the opportunity presented by the emerging affluent middle class in China.įor now JLR cars are imported into China ready-assembled. By 2013, that had risen to over 90,000 vehicle sales in China. In 2012 sales in China grew by 71% to nearly 72,000 vehicles. ![]() Over 80% of JLR's sales are to overseas markets and in 2012 China overtook the UK as JLR's biggest market. But, to most consumers Jaguar and Land Rover are quintessentially British luxury brands – and brands which Chinese are demanding in increasing numbers. Ok, so JLR is now owned by Indian conglomerate Tata Group. If there is one British brand that demonstrates the potential for successful trading with China it has to be Jaguar Land Rover (JLR).
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