4 Minutes
Chery in Talks to Use Jaguar Land Rover Production Capacity in the UK
Chinese automaker Chery is reportedly negotiating with Jaguar Land Rover to use idle Jaguar production lines to build Chery models in the United Kingdom. Although discussions are still at an early stage and no contracts have been signed, the talks send a powerful signal to the global automotive market about shifting supply chains and growing Chinese investment in Europe.
Why the UK could welcome Chery
The British government has set an ambitious target to produce 1.3 million vehicles a year by 2035, a sharp increase from last year's output of about 738,000 units. Closing that gap will likely require strong foreign partners. Chinese brands, eager to secure local production to avoid EU tariffs on imported electric vehicles, are obvious candidates. For the UK, a deal with Chery could preserve jobs, generate investment, and help revitalize plants that currently run below capacity.
Chery's European momentum
Chery's sub-brands OMODA and Jaecoo have emerged among the fastest-growing names in the UK auto market. Meanwhile, Chery Commercial recently announced its first European headquarters in Liverpool, a move meant to anchor engineering and commercial operations on the continent. Local authorities expect the Liverpool hub to create high-value jobs, even though the Liverpool decision is separate from the JLR talks.
Potential benefits and obstacles
If JLR offers spare production capacity, Chery would gain a faster route to locally built vehicles, lowering tariffs and improving price competitiveness for EVs and combustion models alike. Jaguar Land Rover, which is owned by India’s Tata Motors, could benefit from additional revenue and investment — a welcome boost after recent financial setbacks.
However, there are clear challenges:
- Cost pressures: Chery insiders have pointed to high energy and labor costs in the UK compared with China.
- Strategic and political sensitivities: A Chinese automaker using iconic Jaguar lines will attract scrutiny from regulators, unions, and the public.
- No timeline: Both companies describe the discussions as exploratory, with no firm schedule for a takeover of production lines.
Context: JLR's recent struggles
Jaguar Land Rover has faced a turbulent period. A significant cyberattack in late 2025 reportedly cost the company about 196 million pounds. Observers note that some JLR plants likely retain spare capacity that could accommodate one or two additional models. Revenue from a manufacturing partnership with Chery could help JLR recover financially.
Past cooperation and next steps
The two automakers already have some history of collaboration. Jaguar Land Rover had previously made the Freelander nameplate available for development into an electric vehicle by another partner, an example of how legacy brands and new players can cooperate. Still, any transfer of Jaguar production lines to Chery remains speculative until formal agreements are reached.
Highlights:
- Talks are exploratory: no signed contracts yet
- UK wants more local production to hit 2035 goals
- Chery expands in Europe with Liverpool HQ and fast-growing sub-brands
Whether this arrangement becomes one of the most unexpected strategic partnerships in recent automotive history will depend on negotiations, political will, and commercial pragmatism. For car enthusiasts and industry watchers, the prospect of Chinese-built models rolling off former Jaguar lines in Britain is a story to watch closely.
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