A major breakthrough has occurred in the proposed joint venture between Subaru and Chery. Sources familiar with both parties said that the joint venture is, in essence, ready to be approved. According to a report on the Beijing Times today, if Subaru parent Fuji Heavy Industries is willing to allow its vehicles to be branded with the Chery logo and allow Chery to head the sales network in China, there should be no problem with the JV proposal going through.

FHI signed an agreement to establish a joint venture with Chery in the beginning of the year. Both parties agreed to open a production site in Dalian, Liaoning. Subaru's partner in China, Pangda Group, also favors the new joint venture.

However, the JV proposal failed to gain the National Development and Reform Commission's approval, due to FHI 16.5 percent shareholder Toyota already having separate joint ventures in China. The NDRC rejected the proposal in September, causing many to believe that plans for the JV were dead in the water.