Chery Automobile has applied for government permission to establish a joint venture with Jaguar Land Rover in China with an investment of 12.1 billion yuan ($1.9 billion).
The new plant, to be constructed in Changshu in east China's Jiangsu province, would produce up to 130,000 vehicles a year, according to the Web site of China's Ministry of Environment Protection.
Chery and Britain's Jaguar Land Rover signed an agreement in March to form the joint venture.
The deal, which was first reported by Chinese media last year, marks Jaguar Land Rover's latest effort to expand its appeal in the world's largest auto market where luxury sedans and SUVs remain in hot demand even as the overall car market cools. JLR, owned by India's Tata Motors, had previously explored joint venture deals with other Chinese partners, including Great Wall Motor, but made little headway.
The ministry will assess the plant's likely impact on Changshu's environment. China requires environmental reviews before allowing automakers to build new assembly plants.
The ministry is expected to issue a ruling later this month.
If the ministry approves the project, Chery and Jaguar Land Rover still need permission from China's National Development and Reform Commission, the central economic agency.
Last year, Land Rover sales in China jumped 68 percent to 34,993 units, while Jaguar sales soared 58 percent to 3,897 units, according to LMC Automotive. All of those vehicles were imported.
Automotive News Europe contributed to this report