Jaguar Land Rover plans to set up a new engine plant in the West Midlands. Enda Mullen talks to experts about the impact on the region’s economy.

News that Jaguar Land Rover is set to build its new UK engine factory in Wolverhampton represents one of the biggest boosts to regional manufacturing in many years.

Though some industry insiders tipped it as the favoured destination, given its proximity to the Birmingham and Solihull plants and easy access to Halewood, the choice of a Midlands site was far from a given.

Proposals to create a new factory on the i54 site in Wolverhampton provide a resurgent Midlands manufacturing sector with a much-needed shot in the arm and has been welcomed by business leaders and automotive industry experts alike.

Plans for the £750 million plant are still at an early stage but it is expected to create 700 jobs with the possibility of hundreds more in the supply chain.

Hopes for UK component manufacturers will be high after Jaguar Land Rover chief executive Ralf Speith gave a pledge to Business Secretary Vince Cable in March to support British suppliers for the next five years.

The new facility is part of a huge expansion, dubbed the Jaguar Land Rover Revolution, as the company seeks to expand its range by as many as 40 models.

Although JLR remains tight-lipped about the plans it is believed the proposal is already at an advanced stage.

John Lamb, spokesman for Birmingham & Solihull Chamber of Commerce said: “If this is correct it is clearly tremendous news for the whole of the region and continuation of the whole success story that is Jaguar Land Rover.

“It is already deservedly making increased profits. This will not only ensure that continues to happen but will also be a real boost for the local economy.

“This is where the skills are and clearly they recognise that.”

Mr Lamb added that as well as being a boost to the region as a whole it would also benefit manufacturers in the automotive supply chain.

“The well-being for the region cannot be under-estimated and clearly the skills it needs can be produced by this creative area that is the West Midlands,” he said. “I’m sure a lot of the labour it will attract will come from all over.”

Mr Lamb added that it was more good news as far as manufacturing in the Midlands was concerned.

“The last quarterly Birmingham & Solihull Chamber of Commerce quarterly survey, which will soon be published shows manufacturing is on the up and fighting back very well and a lot of that is down to JLR,” he said.

“The recovery is quite remarkable and represents a fantastic turn-around.

“JLR is producing sought-after products, particularly in emerging nations like India and China and have obviously picked the right markets to sell these vehicles in.

“This is extremely positive and very good news for the future of West Midlands manufacturing and the region as a whole.”

Professor David Bailey of Coventry University Business School said: “This is brilliant news and from JLR’s point of view it is the ideal location to get its engines to plants in the Midlands and Merseyside.

“I would actually go so far as to say it is the perfect location – you couldn’t get a better site.

“Engines are bulky components and manufacturers really need to be within a day’s drive of their factories, just off a motorway and with a ready supply of skilled labour.

“We have a lot of engineering skills in the Midlands and this sums up the current strength of the automotive industry in the West Midlands.

“It may well be in an enterprise zone too, so there may be some tax breaks as well. South Wales offered attractions as well in terms of being near to a port, close to steel producers and having a skilled workforce and I did worry that Wales might be able to out-trump us but it is really great news it is coming to the Midlands.”

Prof Bailey said the Indian engine plant that will also be announced was also essential if the company is to continue to succeed in emerging markets like India and China.

As far as the supply chain is concerned he added that he hoped companies in the region would benefit too.

Pointing to the success of the BMW engine plant at Hams Hall, he said: “There will be companies that will benefit from this in terms of components that go into engines but it will be interesting to see how many components are sourced locally.

"We would all like to see as much local sourcing as possible to maximise the benefits to the regional economy.”

But the new plant will not answer all of JLR’s engine needs.