Despite sales of automobiles in China seen to lose its spark this year owing to economic cuts and rising fuel costs, domestic car manufacturer Chery announced on Wednesday it has reached an agreement with Indian-owned luxury carmaker Jaguar Land Rover (JLR) to create and set-up a joint venture project in China.

The proposed JV involves the assembly of JLR- and JV-branded vehicles, the creation of a research and development facility, engine manufacturing as well as sales of the vehicle products made by the JV, state-run Xinhua News reported, quoting a press release found on both websites of Chery and JLR.

"Our ambition is to leverage the respective strengths of our two businesses -- in research and development; technological innovation; manufacturing excellence and local consumer knowledge -- to offer Chinese customers the most advanced, highly efficient products featuring the very latest technologies," the statement said.

No other details were provided regarding the JV.

Established in 1997, Chery has since become one of China's biggest and most productive automotive manufacturers, and is recognized as one of the country's largest vehicle exporters, with exports reaching markets in over 60 countries. In 2011 alone, unit sales reached 643,000, ranking it sixth among China's passenger automobile makers. Chery's vehicle line-up include passenger cars and SUVs, as well as engines and transmissions.

JLR, meanwhile, is a wholly-owned subsidiary of Tata Motors, Brazil's largest maker of luxury vehicles. China is its third largest market, as 2011 annual sales in 2011 jumped by 60 per cent to 42,000 units.

"Working together on this proposed joint venture is an exciting prospect for both JLR and Chery. Demand for Jaguar and Land Rover vehicles continue to increase significantly in China and we believe that JLR and Chery can jointly realize the potential of these iconic brands in the world's largest car market," the statement said.