China has given the green light for Jaguar Land Rove'rs joint venture with car maker Chery Automobile, the company has confirmed.
Speculation had been mounting in the Chinese press that the deal to set up a joint manufacturing operation had received approval from the National Development and Reform Commission (NDRC).
The deal, believed to be worth around s1.9 billion, gained approval in just four months from the NDRC, making it the fastest approval for an automotive joint venture in the past five years.
It follows on from a number of joint ventures in China with western car makers and is likely to be the last for some time.
Chinas Ministry of Industry and Information Technology has already said no more new automobile joint ventures are likely to be approved in the future.
A Jaguar Land Rover spokesman said the deal had been approved but said until it had been rubber-stamped no further details would be revealed.
He said: Jaguar Land Rover and Chery Automobile Company note media speculation concerning their joint manufacturing plans in the Peoples Republic of China and can confirm that the joint venture project application has been cleared by the National Development and Reform Commission.
However, as JLR and Chery have not received written notification from the NDRC about its regulatory decision, neither party is in a position to provide any additional information at this time.
The position of both companies remains as disclosed on March 21 2012, when JLR and Chery issued a joint release confirming the signing of a commercial agreement pending regulatory approval.
On receipt of written confirmation, Chery and Jaguar Land Rover will follow the official process for incorporation of the JV.
The companies are understood to be developing a plant in the city of Changshu, 100 kilometres from Shanghai. It is thought it could be completed by July 2014 and could produce up to 130,000 vehicles a year.
A recruitment campaign for the joint venture got underway in July with jobs advertised in manufacturing, procurement, sales, finance, product development and human resources.
JLR had lengthy negotiations about the joint venture with Chery and prior to pushing ahead with the deal was also believed to have spoken to other potential partners.
The Chinese move is seen as crucial in enabling JLR sell its vehicles at competitive prices in its fastest growing market.
China levies higher taxes on imported vehicles to boost local manufacturing, making it vital for car makers to assemble their products locally.
The scope of the proposed joint venture includes the manufacture of JLR joint venture branded vehicles, the establishment of a research and development facility; engine manufacture and the sale of vehicles produced by the joint venture company.
In a joint statement in March this year Dr Ralf Speth, JLR chief executive officer, and Yin Tongyao, chairman and chief executive officer of Chery described working together as an exciting prospect.
The rapidly developing Chinese market is currently JLR's third biggest after the UK and the US, but 2012 is being tipped as the year when it may snatch the global number one spot.
If so it would follow on from a historic 2011 when China overtook the US as the worlds largest car market, with new car sales of around 18.5 million. Sales there are expected to increase by another 1.5 million this year.
The company's expansion in China has been both swift and significant. Total JLR sales in China in 2011 were around 42,000, with Land Rover making up the lions share of around 36,000 vehicles. That figure compares to just 431 vehicles sold in 2003.
In the first quarter of 2012 Chinese sales were up by 105 per cent year on year, setting a new record for the company's highest quarterly sales in China at around 17,000 cars. It is thought around 5,000 of those were Range Rover Evoques.
JLR has refused to comment on speculation regarding production volumes but it is thought that around 50,000 vehicles might be produced by the company with the first Chinese-built model being the Land Rover Freelander.