Indian car-maker Tata is to locate its Jaguar Land Rover unit in China. It will become the latest luxury marque to make the move to the world’s biggest vehicle market after Audi, Mercedes-Benz and BMW.

The unit will team up with local carmaker Chery Automobile to build a 10.9 billion yuan (€1.36 billion) manufacturing plant in eastern China and create a new brand to cater to the nation’s growing army of consumers.

The 50:50 joint venture will also set up a research and development centre and build an engine plant as part of the investment. The deal has been approved by the National Development and Reform Commission.

“China is now our biggest market,” Ralf Speth, chief executive of Jaguar Land Rover, told reporters after the groundbreaking ceremony for the factory in Changshu, near Shanghai. The plant is to be completed by 2014.

Phenomenal growth

“The Chinese economy has grown at a phenomenal rate in recent years and, by any western standard, I’m convinced that it is set to continue to grow at an astounding rate into the future.”

Companies have located in China because the government requires overseas car makers to work with local companies to produce domestically and avoid its 25 per cent import duty.

While sales in Europe are flagging, Land Rover is doing well in China. The Evoque is a big favourite, as seen at the Beijing Auto Show this year when Range Rover showcased a special edition of the Evoque designed by Victoria Beckham.

Chery’s partnership with Jaguar Land Rover follows rapid expansion of the Jaguar and Land Rover brands in China, where sales rose 80 per cent in the first 10 months to October 2012.

“The benefits of the joint venture to China include investment, job creation, advanced technology and low-carbon solutions,” Jaguar Land Rover said in a statement.