Jaguar Land Rover chooses Wolverhampton
Sites in Cardiff, Coventry and Newport were all considered. A second factory will be built in India, where JLR's parent company, Tata, is based.
The Wolverhampton facility is expected to produce 'smaller' engines, and should be operational within 18 months.
Designed to improve productivity
The new engine factory will help ease supply problems, which resulted in axed shifts in the run up to Christmas. JLR currently gets its engines from Ford.
JLR's £1.1 billion profit in 2010 was partly due to hugely increased sales in China and other emerging markets.
To capitalise on this, both Jaguar and Land Rover are planning to expand their model ranges with up to 40 new models, so a new engine factory is vital to the success of this strategy.
Professor David Bailey of Coventry University Business School said: 'JLR needs to be bigger to generate the cash needed for new model development.
A JLR spokesperson said: 'The company has ambitious plans for growth and there are many matters related to that.'
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