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China's largest passenger vehicle exporter, Chery Automobile Co Ltd, is in talks with banks for a roughly Rmb6bn ($951.3 million) loan for its joint venture with Jaguar Land Rover Ltd (JLR) , a wholly owned subsidiary of India's Tata Motors Ltd, sources said.

The two companies released a joint statement on March 21 saying they had reached an agreement to establish a JV in China, which will manufacture and sell vehicles under both JLR and the new JV brands.

JLR and Chery will look to leverage research and development, technology and manufacturing knowledge across the JV, the companies said.

Sources said the two companies are seeking regulatory approval for the Rmb17.5bn venture, which is to be based in Changshu, Jiangsu province. The companies will proceed with the loan when the JV gets the approval, sources said.

Reuters reported earlier that the JV would initially make Land Rover SUVs, followed by Jaguars in the second phase.

The financial details of the JV were not disclosed in the joint statement.

Sales in China contributed 17.2% of JLR's revenue in the quarter to end-December, more than the United Kingdom, the birthplace of the two brands. Demand for Jaguar and Land Rover vehicles continues to increase significantly in China and the companies believe they could jointly realise the potential of these brands in the world's largest car market, the statement said.

Founded in 1997, Anhui-based Chery produces passenger cars and SUVs, as well as engines and transmissions. In 2011, Chery recorded sales of 643,000 units, ranking No.6 among the passenger vehicle manufacturers in China, according to a company release.

ANOTHER JV ALSO SEEKING LOAN

Meanwhile, Qoros Auto Co Ltd, Chery's first JV with a foreign company, is seeking a Rmb3bn 10-year loan for its factory construction project.

Also located in Changshu, the 50-50 JV between Chery and investment firm Israel Corp has mandated Export-Import Bank of China to lead the Rmb3bn loan. Several major state-owned banks are going through internal credit assessment to join the deal, sources said.

The loan is offering a margin of at least 100% of the PBOC rate, according to a source. It repays after a three-year grace period, which is equal to the factory's construction period, the source said.

Both shareholders will be guarantors of the deal, while the loan is secured by all the assets of the factory construction project.

The deal is slated to close in mid-May.

Established in 2007, Qoros Auto, formerly known as Chery Quantum Auto Co Ltd, launched its first car brand Qoros in November 2011. The brand will go on sale in 2013 in China and Western Europe, a market the company hasn't yet entered with its own brand name, according to the company's website.

Qoros has a top team of experienced auto experts and executives from the West, including former Mini chief designer Gert Hildebrand, Reuters reported last November.

Sources said the Changshu factory needed total investment of Rmb7bn. On completion, the factory will have an initial production capacity of 150,000 vehicles per annum, the company website said.

Construction of the factory's main buildings will be finished by June, before the assembly line is installed, a Qoros spokesman said. The entire factory will be ready to produce cars by the end of this year, he added. But Qoros could not comment on the financing.

Chery was not immediately available for comment.

On December 28 last year, Chery obtained a Rmb1.8bn loan for working capital. Huishang Bank was the mandated lead arranger of the facility that has a tenor of less than two years.