Following an extremelty hard two years for the car industry, Why does Jaguar Land Rover needs a new engine plant? By business correspondent Peter Carroll.

How things have turned around. Two years ago this month, during the depths of the global recession, Jaguar Land Rover confirmed it was looking to mothball one of its flagship production plants.

The announcement in 2009 was greeted with gloom in the West Midlands – for while JLR bosses were careful never to identify publicly which plant faced the axe, Jaguar’s Castle Bromwich factory was thought to be most at risk.

Then, slowly but surely, the car industry began to recover and the great JLR resurgence began in earnest.

Today, the company’s position has completely transformed and it is bullish concerning its future.

Sales have not quite returned to the record levels prior to the recession but Jaguars, and especially Land Rovers, are in demand in the emerging markets of South America and the Far East.

Indeed, the recovery has progressed at such a rate that JLR will now not only be keeping both its Castle Bromwich and Solihull manufacturing facilities open – it has also sanctioned the investment of £350 million on its new engine plant in Wolverhampton.

In addition, JLR is investing some £7 billion on a series of around 40 new models and derivatives which it will launch in the coming years.

So why does it need a new engine factory? In short – because it does not have one. JLR does not want to have to rely on other firms for its power plants – especially when there is burgeoning demand for its cars.

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