The plant will be built near Shanghai by 2014 and forms part of a $1.7 billion investment between the Indian-owned British brands and Chinese car maker Chery that will also include an engine factory and research and development centre.
The new joint venture company, to be called Chery Jaguar Land Rover Automotive Company Ltd, will also use the partnership to create specific models under a new brand for the Chinese market.
"The benefits of the joint venture to China include investment, job creation, advanced technology and low carbon solutions," said Jaguar Land Rover in a media statement. "The joint venture will blend together the heritage and experience of luxury premium vehicle manufacturer Jaguar Land Rover with the intricate knowledge and understanding of Chinese customers evident at Chery."
JLR will join the likes of Volkswagen, Audi, BMW and Mercedes-Benz in building vehicles in China, which already partner with local companies to help avoid the country's high vehicle import tax of 25 per cent.
Jaguar Land Rover has sold nearly 300,000 vehicles globally to October 2012. In China, sales grew by 60 per cent in 2011 and in the first 10 months of 2012 have increased by another 80 per cent.
JLR attributes its Chinese growth to the Jaguar XF and XJ sedans and the Range Rover Evoque (pictured above).