BEIJING (Reuters) -- Jaguar Land Rover and Chery Automobile have won regulatory approval to form a 12.1 billion yuan ($1.92 billion, 1.47 billion euro) car venture in China, Chery said on Friday.
The deal will help raise the profile of Chery, a mass volume player aspiring to gain access to the lucrative upscale segment dominated by foreign brands.
It also 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.
When asked to confirm a local media report that the project had won approval from the National Development and Reform Commission (NDRC), a Chery spokesman said: "We heard the project has been approved, but we have yet to receive the official notice from NDRC."
The Chery-JLR venture will be based in Changshu city near Shanghai with an annual capacity of 130,000 cars. The partners will make Land Rover SUVs initially, followed by Jaguars in the second phase.
Earlier in the year, JLR and Chery received the green light for the venture from China's environment ministry.
JLR announced in March that the scope of the joint venture would include engine manufacturing as well as a new range of vehicles jointly developed with Chery.
JLR, controlled by India's Tata Motors Ltd, had previously explored joint venture deals with other Chinese partners, including Great Wall Motor Co Ltd, but made little headway.
The Chery tie will give JLR a local production base in China, where global luxury markers including BMW, Mercedes-Benz and Audi are tapping into the growing ranks of wealthy Chinese.
China is JLR's third biggest market after the UK and U.S. based on 2011 sales. In the same year, Chery was China's sixth biggest carmarker.
Automotive News Europe contributed to this report