9.20.2011

Jaguar Land Rover Builds a new engine plant in the UK


aguar Land Rover will invest 355 million pounds ($561 million) to build a new engine plant in the UK, the company said today.

The chosen site in Wolverhampton, central England, will manufacture a family of four-cylinder gasoline and diesel engines and help drive efficiencies across the company's other UK facilities.

JLR's engines are currently supplied by Ford Motor Co, which sold the brands to India's Tata Motors in 2008.

Mike Wright, executive director at Jaguar Land Rover, said the company had considered building the facility in a number of locations within the UK and outside the UK.

"One obvious location would have been India," Wright told journalists. "There are a whole host of factors that go into these decision ... but on the balance of all of those factors, we determined with the support of Tata Motors, in this instance, the UK was the best option," he said.

JLR has three assembly plants in central England. Situating the engine factory "almost equidistant between our Halewood, Solihull and Castle Bromwich plants does have efficiency benefits," Wright said.

As part of its growth strategy and investment, Jaguar Land Rover is targeting 40 new products over 5 years, as it eyes emerging market growth.

"(The site) will enable us to accelerate our new products to penetrate new markets," said Wright. "Our latest investment decision follows a period of rising sales, rising demand and rising profitability," he said, adding that the business is performing in line with expectations.

The UK government is keen to support manufacturing in Britain and will provide up to 10 million pounds for the plant, which is expected to create 750 jobs.

Jaguar Land Rover already employs more than 19,000 people in Britain and supports up to 140,000 jobs. It has been boosted by strong demand from emerging markets such as Russia and China for its cars.

"As we invest 1.5 billion pounds a year for the next five years on new product developments, expanding our engine range will help us realize the full global potential of the Jaguar and Land Rover brands," said Ralf Speth, JLR CEO.

Speth said last week at the Frankfurt auto show that JLR expected to decide on a local partner for production in China by the end of this year.


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