Tata's Jaguar Land Rover Unit To Build Plant In U.K.

British carmaker Jaguar Land Rover has announced it is investing more than $500 million in a new British plant to build fuel-efficient, four-cylinder engines. And the company's Indian owner Tata Motors says it plans to pour more than $2 billion a year into Jaguar Land Rover over the next five years.

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Even in times of economic stress, some companies expand. For example, India's largest car company, which is making some big investments in its high-end brand, Jaguar Land Rover. Tata Motors announced yesterday it's spending more than half a billion dollars on a new plant which will be in the UK. The factory will build low-emission engines. Tata says it plans to pour more than $2 billion dollars a year into Jaguar Land Rover over the next five years. From London, Vicki Barker has more.

VICKI BARKER: When Tata acquired the loss-making luxury carmaker in the midst of global meltdown, three years ago, many considered it a rare misstep for the usually sure-footed Indian conglomerate. In fact, says Baback Yazdani, of Nottingham Business School, ensuing events have vindicated the company.

BABACK YAZDANI: Well, the Tata's investment has been quite shrewd and wise in developing products that everybody wants to buy across the world. And that has meant that the company bounced back from a very severe recession, very successfully and very quickly.

BARKER: This year Jaguar Land Rover posted record annual profits of more than one $1.7 billion. David Bailey, of Coventry University, says head office in Mumbai can take some of the credit for the turnaround.

DAVID BAILEY: They're patient owners, and they allow management to get on with it. So I think the way they've run the company has really helped the firm exploit its strengths in terms of research and development and design.

BARKER: The new plan, in the central English city of Wolverhampton, will design and manufacture fuel-efficient four cylinder engines. It's expected to employ up 750 highly skilled workers, and analysts say, create thousands more badly needed jobs in Britain. For NPR News, I'm Vicki Barker in London.

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