Jaguar Land Rover Revs Up Its Engine Plant in China

(Beijing) — Jaguar Land Rover’s engine plant in China began operation on Friday, marking the first time the automaker has produced engines outside of Britain.

The move is in line with Jaguar Land Rover Automotive Plc. (JLR)’s strategy to emphasize international manufacturing and construction of new facilities, in an effort to add capacity to its UK facilities that are nearly full, according to the company’s annual report for 2015-16.

The automaker — the U.K.-headquartered and a wholly-owned subsidiary of Tata Motors since 2008 — has already opened manufacturing plants in India, Brazil and China. Its Chinese factory is located in the eastern city of Changshu. It was built under a joint venture program with Chinese carmaker Chery Automobile Co.

The engine plant is a milestone that marks an upgrade of the JLR-Chery joint venture by giving it the ability to produce auto parts, the company said in a statement to Caixin.

The plant’s first product will be the latest “Ingenium” engine series. The more environment-friendly engine will be used in all cars produced by Chery-JLR factory, including the three models that are currently under production for Chinese customers — the Range Rover Evoque, Land Rover Discovery Sport and Jaguar XFL.

The new engine plant has an initial annual capacity of 130,000 units, but it will eventually be expanded to 240,000 units. The joint venture won approval from Jiangsu provincial government in June. Once it hits its 240,000 target, some of the engines will be exported to Britain, Li Lizhong, Chery’s executive vice president, said at the opening ceremony, news site Internet Info Agency reported.

The new facility achieved zero effluent discharge and is equipped with rooftop panels to save electricity. This is to conform to one of the strictest emission regulations in China, intended to protect the nearby Yangtze River, the company said in a statement to Caixin.

In 2015, the joint venture sent 67 technicians from the plant to a training program in Britain to ensure the China-made engine’s quality would be the same as those made in Britain.

“China is one of Jaguar Land Rover’s most important markets globally,” Pan Qing, executive director of JLR Chery, said in a previous statement.

China was the company’s fastest growing market in 2016, with sales increasing by nearly one-third from the previous year. In June, retail sales in China rose 65.3%, followed by a 3.8% increase in Britain and 3.7% in the U.S., according to a press release in JLR’s official website.

Last year, JLR invested 3.4 billion pounds ($4.41 billion) in new models, plants and technology, including 1 billion pounds to build an auto plant in Slovakia. The company plans to increase this to 4 billion pounds in 2017, JLR said in a statement.

Contact reporter Song Shiqing (shiqingsong@caixin.com)