Sources say Jaguar Land Rover is in talks with Chery Automobile about setting up a long-awaited joint venture in China.
Reports in the Far East claimed JLR was seeking regulatory approval as part of plans to manufacture cars for the emerging market.
An industry source told the Post that Chery remained the front-runner, but it was also possible that rival firm Geely could emerge as a rival.
“Chery Automotive is certainly the front runner at the moment and Geely still might have a chance as well,” he said.
“There are still negotiations going on and the whole thing is very dependent on the Chinese government, which is why they are so jumpy about talking about it.
“They hope to have the negotiations completed by December and it will be a manufacturing plant over there which will start off quite small and build up.”
China Business News said the two companies had finished discussions for a manufacturing tie-up.
In the past, Chery and Fuji Heavy Industries had planned to make Subaru vehicles in China but have been unable to get regulatory approval due to potential conflicts with Beijing’s industry policy.
Jaguar Land Rover, owned by Tata Motors, has reportedly also been looking for a Chinese partner and had contacted a number of car manufacturers, including Great Wall Motor Co.