Ford to spend £9bn on Land-Rover and other luxury marques

Ford is to invest $12.5bn (£9bn) over the next five years in its luxury car brands which include Jaguar, Land-Rover and Aston Martin in the UK.

The investment will be tied to a big increase in production which will see output from Land-Rover's Solihull plant in the West Midlands rise by more than 50 per cent alone to 265,000 units.

But in return Ford is demanding substantial improvements in quality levels of its prestige marques, in particular the Land-Rover brand, which Ford acquired last year from BMW for £2bn.

Wolfgang Reitzle, president of Ford's Premier Automotive Group, said that Land-Rover would "sink" unless its model range became as reliable as the Mercedes S-class or the BMW 7 series.

Speaking at the official unveiling of the new Range Rover, which cost £1bn to develop and goes on sale next February, Dr Reitzle said: "When there have been problems at Land-Rover, it has always been about quality. We have made huge progress but it is not enough." A large part of the £9bn investment will be concentrated on the US luxury brand Lincoln, along with Volvo, one of the two other marques in the PAG family.

But there will be substantial further investment in Land-Rover and Jaguar. The aim is to replace the existing Land-Rover family completely in the next five years, starting with a new Discovery model. There is also expected to be a baby Range Rover and a new Freelander. Mr Reitzle also said that a revamped Jaguar S-type would appear next spring.

Bob Dover, the head of Land-Rover, has been put in overall charge of the three brands in the UK but responsibility for manufacturing will be given to Jaguar's current head of production, Mike Beasley.

Marketing of the brands will be kept separate but Dr Reitzle wants to see much greater rationalisation of the dealer network and common sales and procurement organisations for all three brands.

At 2.4 tonnes, the new Range Rover will be the heaviest car ever built in the UK as well as the most costly to develop. Prices will range from £47,000 to £65,000.