Indian-owned Jaguar Land Rover (JLR) is to invest billions of pounds in Britain and has canceled plans to close one of its auto plants there after reaching a deal with trade unions, the company said Friday.
JLR, owned by India's Tata Motors, said it would significantly increase its model range and overall global volumes, creating thousands of jobs over the next decade.
Last year Tata said it would merge two of its three JLR plants in England as part of a plan to tackle falling demand.
But the company said business had now improved.
"We have ambitious plans for growth...and this agreement will allow us to accelerate and realize those plans," said Jaguar Land Rover Chief Executive Officer Ralf Speth.
"Our parent company Tata supported us through the recession and our employees also made sacrifices but now we are seeing a great turnaround in the business," he added.
Europe's luxury carmakers say they are not worried about a possible double-dip recession, predicting that growing numbers of wealthy customers in emerging markets will make up for any weakness in mature markets.
A boom in the premium car market this year has rendered the global financial meltdown, and an accompanying collapse in bonus-fueled demand from bankers, a distant memory.
Wednesday Porsche SE said its sports car business had earned nearly as much in the fourth quarter alone as it did in the previous nine months.
Francisco Camilher-Carvalho, analyst at IHS Global Insight, said that with new, diversified products in the pipeline and Tata's established network in India, JLR was well placed to gain market share.
"The major driver we've had in luxury cars recently was the emerging markets and as Tata now owns Jaguar and Land Rover ... it gives them a little head-start in relation to other premium manufacturers," he said. "They will have the contact base in India and know how to adapt to the market."
BOOST FOR BRITAIN
The investment will also provide a welcome boost for manufacturing and the British economy when the government's planned austerity measures could stifle recovery.
Speaking outside JLR's Castle Bromwich plant in central England, local Member of Parliament Jack Dromey told reporters the "unprecedented" deal was worth 5 billion pounds over 10 years, but the company declined to confirm a specific figure.
The British car industry, which employs more than 850,000 people, produces around 1.7 million vehicles a year -- accounting for 10 percent of the country's total exports.
