JLR puts its foot down with £355m UK engine plant

Jaguar Land Rover has plans to build its own engines - in a new £355m factory in Wolverhampton.

by Elizabeth Anderson
Last Updated: 06 Nov 2012
The Indian-owned luxury carmaker – whose sales are booming in the emerging markets – confirmed that it is sticking to its West Midlands manufacturing roots, and intends to open a new low-emission car engine plant in the West Midlands.
 
Up to 750 skilled jobs will be created at the new £355m, 120-hectare site near Wolverhampton, with hundreds more jobs created indirectly in the supply chain. It marks a remarkable turnaround for JLR, which is owned by India’s leading vehicle maker Tata Motors. When Tata bought Jaguar and Land Rover from Ford for $2.3bn in 2008, Jaguar sales had slumped – and that was before the disastrous effects of the financial crisis of 2008.  But, thanks to soaring demand in China and the emerging markets, it looks as if Jaguar is back on track – revenues doubled in the last year to £9.9bn.      
 
The engine plant will also help the firm become more independent of former parent Ford, which currently manufactures JLR’s engines in its Bridgend and Dagenham factories. The news has been greeted with cheers from unions and the government, which has been calling for a ‘march of the makers’ to boost the economy. Over the past few months, the manufacturing industry has been teetering: the latest data shows that output figures shrank to a 26-month low in August. So the location of the new JLR factory is a victory for the West Midlands, especially when the UK faced competition from elsewhere.
 
‘There was fierce competition for this engine plant. Tata could have done it in India, it could have done it in various places. But it's chosen to invest in Britain and in the West Midlands,’ Business Secretary Vince Cable was quoted in the Telegraph as saying. He also said that, while a £10m government grant for the project was a show of support for Tata, it requires £350m investment from the Indian manufacturer so the decision wouldn’t have been taken lightly. As the plant will be located in one of the government’s new enterprise zones, it will also benefit from tax breaks and investment allowances: the total government support pledged is though to be around £10m.
 
Considering that car makers BMW and Nissan have also announced more than £6bn of investment in the UK this year, it looks like that ‘march of the makers’ might not be too far-fetched after all…

Find this article useful?

Get more great articles like this in your inbox every lunchtime

Subscribe

Get your essential reading delivered. Subscribe to Management Today