Jaguar Land Rover opens first overseas engine plant in China

The British car manufacturer looks to weather potential Brexit storm with a brand new engine production hub in China

Jaguar Land Rover looks to weather a Brexit storm by building engine parts in China (Getty)

Jaguar Land Rover (JLR) opened its first overseas engine plant on Friday, picking China for the investment a week after saying it would build a global model entirely outside Britain for the first time.

Britain's biggest carmaker, which already operates a plant in China as part of a partnership with Chery, said the new facility was part of a £1.2bn ($1.6bn) investment with the Chinese carmaker.

"The new engine plant demonstrates Jaguar Land Rover’s long-term commitment to the Chinese market, providing customers with an exciting range of vehicles and powertrain options, as well as to its joint venture," JLR said in a statement.

The site will make the new Ingenium 2.0-litre four-cylinder petrol engine. China was JLR's fastest growing market in 2016, accounting for 20 per cent of global sales.

JLR, owned by India's Tata Motors, is rapidly expanding its production levels and model line-up and decided in 2015 to build a major new plant in Slovakia, rather than expand its operations in Britain.

Earlier this month, the carmaker said it would build its new E-PACE compact sport utility vehicle in Austria and China, the first car made for global sale to be built outside of Britain.

Like much of the British car industry, Jaguar Land Rover is worried that Brexit could leave its car exports facing lengthy customs delays and tariffs of up to 10 per cent, jeopardising the viability of production in Britain.

Reuters