Jaguar Land Rover has struck a deal with Chery Automobile Company that will see the company build its cars in China.
The announcement of a joint venture between JLR and Chery follows the recent granting of regulatory approval for the move by the Chinese authorities.
JLR had lengthy negotiations with Chery and prior to pushing ahead with the deal was also believed to have spoken to other potential partners including Great Wall and Geely.
The Chinese move is seen as crucial in enabling Jaguar Land Rover 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, Dr Ralf Speth, JLR chief executive officer, and Mr Yin Tongyao, chairman and chief executive officer of Chery said: “Working together on this proposed joint venture is an exciting prospect for both JLR and Chery.”