Jaguar Land Rover (JLR) has made an agreement with Chery Automobile Company to build and sell its premium luxury brands in China as part of JLR’s plans to enhance its growth in the Chinese car market.

The chinese market has been showing an increased demand for premium sedans and SUVs. However, the agreement which is reported to be worth 17.5 billion Yuan, is not final as it has to be approved by China's regulators.

"Demand for Jaguar and Land Rover vehicles continues to increase significantly in China and we believe that JLR and Chery can jointly realize the potential of these iconic brands," said JLR Chief Executive Officer, Ralf Speth, in a statement.

In December 2011, China's National Reform and Development Commission (NRDC) and the Ministry of Commerce commented that they would stop encouraging foreign investment in the car manufacturing industry to allow “healthy development” of the market.

The change ends seven years of foreign-investor benefits including reduced tariffs on imported plant equipment. An agreement between Fuji Heavy Industries and Chery to manufacture Subaru cars in China is still pending approval since last year.

In China, manufacturing activity fell to a four-month low in March 2012, adding fuel to concerns over slowing growth in the world's second largest economy. Taking that into consideration, it may be wise for JLR to re-assess the demand for high-end luxury cars in the country before making the investment commitment.

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