Jaguar Land Rover to create 600 jobs in economy drive

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The double threat of soaring petrol prices and strict emissions targets has forced Jaguar Land Rover to hire 600 engineers and technical staff in a desperate effort to increase the efficiency of its gas-guzzling vehicles.

The recruitment drive is part of the £700m project, announced by the two companies last year, to develop less thirsty, less polluting cars. It comes against the background of a European Union directive that industry observers say could threatenthe viability of the Britishmarques.

The EU has proposed that, from 2012, average emissions for new cars should be 120 grams per kilometre. None of the current Jaguar or Land Rover models meet the criteria. Some, like the top-of-the-line Range Rover, emit more than 300 grams per kilometre. Failure to meet the 120 gram target would result in a per-gram penalty that rises every year from 2012.

An arguably greater challenge for Jaguar and Land Rover, however, is the soaring cost of fuel. In America, the largest market for Jaguar and also vital to Land Rover, sales of the petrol-thirsty Hummer have plummeted by half in the past year, leading General Motors to launch a review of the business which could lead to its sale or closure. Last year, President Bush signed into law the first new fuel efficiency regulations since the 1970s.

Yesterday's announcement by Jaguar Land Rover comes weeks after it was sold by Ford to the Indian car giant Tata for £1.2m.

Most of the new engineering jobs will be based at the group's development centre in Gaydon, Warwickshire. It will also start a graduate programme for more than 80 graduates to join the business in September, at the Land Rover plant in Gaydon and at Jaguar's factory in Whitley, near Coventry.

Tata, which took control of the group on 4 June, approved the new plan but was not the driving force behind it and will not send extra personnel to Britain to run the scheme. "Tata have made it very clear they do no intend to interfere in the business," said a spokesman.