An expansion of the plant – one of the biggest car manufacturing facilities in the UK – comes amid growing worries over a slowdown in UK industry and the prospects of a double dip recession in the wider economy. JLR’s Land Rover plant in Halewood is at full capacity producing the new Range Rover Evoque and growing the factory will allow the company to keep up with surging demand for its products.
Sources familiar with the situation say the company is exploring plans to double the size of the plant by developing on surrounding land. This will represent an investment of around £100m, although the proposals are thought to be at a relatively early stage. The premium car maker has already confirmed it is building a £355m engine plant in Wolverhampton and is redeveloping its factory in Solihull. It has hired thousands of new employees over the last 12 months to launch new models, including for the Evoque at Halewood last year.
The release of the Evoque, nicknamed the “Baby Range Rover”, has sparked another stage of expansion for JLR. Its sales are up 30pc year-on-year. It is understood the company is on course to post new record profits for the 2012 financial year and could even make £1.5bn.
JLR employees were called into work over Christmas to work a special shift to help keep up with demand. An expansion of Halewood, which employs 3,000 people at present, will take the UK another step towards producing a record number of cars. The country produced 1.9m cars a year in its manufacturing heyday in the early 1970s.
However, it could break that annual record within five to 10 years following £4bn of investment in the last 12 months from car makers such as Toyota, BMW and JLR. JLR has enjoyed a remarkable turnaround since seeking loan guarantees from the Labour Government in 2009. Demand for its premium cars in emerging markets led to JLR posting record profits of £1.1bn in the year to March 31, 2011.
Under chief executive Ralf Speth and Indian parent Tata, JLR is investing more than £1bn a year into research and development. It wants to launch 40 new vehicles in the next five years, including a Jaguar sports car and a new Land Rover Defender. The company is in talks with Chinese car maker Chery about a joint venture that would allow JLR to open manufacturing facilities in China for the domestic market. The car maker is also exploring how it can work more closely with British schools in order to boost the number of engineering graduates.
A spokesman for JLR said: “JLR has not made any announcements about Halewood and we do not comment on speculation about possible future plans.”
Despite the global economic uncertainty, a new survey from General Electric says 71pc of high-tech manufacturers in Britain are forecasting their business will grow in 2012.
Out of more than 350 businesses questioned, a quarter said their business will grow by more than 10pc. The manufacturers said this is due to demand from emerging markets, the helpful exchange rate and internal improvements in products and services.
The growth predictions have been made despite only 15pc of manufacturers being positive about the UK economy. Also, 26pc said bank finance remained either “impossible to obtain, or obtainable only on unacceptable terms”.
Mark Elborne, chief executive of GE UK, said: “These figures demonstrate UK high-tech manufacturing is still a growth story and can play a pivotal role in turning round the UK’s economy. It is encouraging to see that a good proportion of these firms are expecting significant growth in the next 12 months. However, we need to ensure conditions are right to help them grow and take advantages of the opportunities on offer.”
[Source: Daily Telegraph]