Jaguar Land Rover: China approves joint venture
Nov 17th, 2012 by josephluiz
“Jaguar Land Rover is to make vehicles in China for the first time after Beijing approved a £1bn joint venture.”
China is a growing market for Jaguar Land Rover, with the Chinese sales of JLR models already risen “by 80% so far this year.” To meet the demand from the Chinese market JLR will build an automobile plant near Shanghai. A new factory means they can increase total output to meet that of the new demand, and the location of the factory (China) allows the firm to avoid import taxes into China that they are currently paying. This cost reduction will allow the JLR to increase its profit margin that could lead to lower prices or extra expenditure towards research and other areas.
This billion-dollar deal will also create an increase in jobs for China and hopefully have a positive impact upon both Chinas economy and the worlds. JLR reassured that in China “any cars produced would be in addition to its existing output… and that it [has] no intention of moving its manufacturing base out of Britain.” JLR is seen to be preserving existing jobs in the West whilst also expanding into a new market.
http://www.bbc.co.uk/news/business-20384431