Jaguar Land Rover plans China engine plant

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LONDON -- Jaguar Land Rover is finalizing plans to build an engine factory next to its new vehicle plant in China. The factory would be the British automaker's first engine plant outside the UK.

Jaguar Land Rover will start vehicle production at a new plant with joint venture partner Chery Automobile in Changshu, China, at the end of this year or the beginning of next year, Ian Harnett, JLR's purchasing director said. "We have an opportunity to build an engine factory and there is a opening date," Harnett said.

Harnett said the plant would build the company's new range of Ingenium four-cylinder engines. "We are not going to develop another engine range," he told Automotive News Europe.

Harnett did not say when the engine plant would open.

JLR has not said which model it will build in China but the company's China President, Bob Grace, told reporters at the Beijing auto show in April that it will be "a product from the Land Rover stable, so it’s going to be an SUV.”

China is vital to the growth plans of both Jaguar and Land Rover. Last year in a report focusing on the financial future of the brands, Bernstein analyst Max Warburton wrote that JLR is targeting annual vehicle sales of 150,000 in China by 2015.

Last year the automaker said it sold 425,006 Land Rovers and Jaguars worldwide, without revealing China sales. Warburton estimated China generates more than 50 percent of the firm's profit, mainly from sales of the Range Rover and Range Rover Sport.

The company, owned by India’s Tata Motors, will open a new engine plant near Wolverhampton, central England, in 2015. The new Jaguar XE sedan, a rival to the BMW 3 series, will be the first model to receive new gasoline and diesel engines built at the UK plant. JLR currently uses engines supplied by Ford Motor.

You can reach Nick Gibbs at nick.gibbs@btinternet.com.

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