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Jaguar Land Rover to build £400m engine plant in West Midlands

Resurgent car maker says new factory will create 2,000 jobs as it produces more cars to feed demand from Asia

The car maker Jaguar Land Rover is poised to confirm this week that it will build a £400m engine plant in the Midlands that will create up to 2,000 jobs, it has been reported.

The company could announce the engine plant as early as Monday with the blessing of Vince Cable, the business secretary, after securing financial support from the government, according to the Sunday Telegraph.

The move would be a boost to the government’s plans to stimulate growth by rebalancing the economy towards manufacturing.

The coalition government, which has identified the car industry as “crucial” to its recovery plans, has offered around £10m of support for the Jaguar plant, the newspaper said, although it is not clear what form this will take.

The plant will be based at the i54 business park in Wolverhampton, which has been designated an enterprise zone. It is likely to take around two years to build and could eventually employ up to 2,000 workers, according to a source close to the negotiations.

Jaguar Land Rover has enjoyed a dramatic turnaround in fortunes in recent years, boosted by strong demand from emerging markets such as China and Russia.

The company reported pre-tax profits of £1.1bn in the year up to 31 March, up from £14.6m the previous year. Revenues increased 51% to £9.9bn.

Tata Motors, controlled by the billionaire Ratan Tata, bought the company from Ford in June 2008. But soon afterwards, the global car market went into reverse, pushing the company into a loss. It did say it was considering closing one of its production plants in the West Midlands to cut costs.

But as the car market began to recover, the management last year performed a U-turn and said all three plants – at Castle Bromwich and Solihull in the West Midlands and Halewood on Merseyside – would stay open. With sales showing growth, the company announced more investment and said it would create an additional 1,500 jobs at Halewood.

The company has already hired 3,000 staff this year, including a record 350 graduates, and now employs almost 21,000 people in the UK.

JLR’s engines are supplied by Ford from plants including Bridgend in Wales and Dagenham in north-east London.

However, the car maker wants to take greater control of its engine production as sales boom in Asia. It is also considering building a plant in India.

At the Frankfurt motor show last week, the company unveiled three new concept cars, including a new version of the iconic Defender and an eagerly awaited two-seater Jaguar sports car. © 2011 Guardian News and Media Limited or its affiliated companies. All rights reserved. | Use of this content is subject to our Terms & Conditions | More Feeds