Honda And Jaguar Land Rover Invest In UK Sites

The UK's struggling automotive industry has been given a boost as two British car manufacturers announce significant investment in their UK sites.

Jaguar Land Rover said it has spent £370m upgrading its manufacturing facilities in Solihull, near Birmingham, while Honda announced plans to invest £267m at its Swindon plant.

The announcement by Jaguar Land Rover came as it revealed the new Range Rover - the first sports utility vehicle (SUV) to be made out of aluminium, making it stronger and 20% lighter than earlier models. The company has created an aluminium body shop at its West Midlands plant, enabling the new vehicle to be produced in the UK.

Ralf Speth, Jaguar Land Rover chief executive, said the investment demonstrates the company's commitment to Britain.

The Japanese car giant Honda also said it will produce its new vehicles - the new Civic and CR-V - as well as a new 1.6-litre diesel engine at its UK site.

More than 500 new workers have been hired by Honda to build the new products, taking the total workforce in Swindon to 3,500.

It is the biggest investment in the site by the company in over a decade, with production expected to double by the end of 2012 to 183,000 cars - rising to 250,000 over the next three years.

Around 60% of the cars and engines built at the Swindon factory are exported to more than 60 countries across Europe, the Middle East, Africa and Australia.

Dave Hodgetts, Honda UK managing director, said: "This investment programme underpins Honda's commitment to manufacturing in Britain and to our UK workforce.

"The European market is obviously in decline - you can't argue with that," he said. "The only market in Europe that really is quite strong is the UK market."

The Society of Motor Manufacturers and Traders (SMMT) said that the market grew by 0.1% last month - but highlighted that August is typically a quiet month.

Between January and August this year, new car sales increased by 3.3% compared to 2011.

Industry analyst Jay Nagley said that the UK's automotive industry will continue to grow.

"The long term trend is definitely upwards," he said.

"For the Japanese, the UK is strategically crucial - the strength of the yen is driving the expansion and increasing European capacity.

"As such, the sector is poised to grow at its best rate since the 1960s and in the next four years, UK production will overtake the 1972 peak in production."