Business secretary Lord Mandelson has announced that up to £27m of government support will be made available to Jaguar Land Rover for the production of an all-new car based on Land Rover's LRX Concept.
Jaguar Land Rover is looking to invest some £400m in the project, which would help safeguard jobs and lead to the production of a new greener model.
The government is supporting the project with up to £27m under the Grant for Business Investment scheme. This is separate from the £2.3bn Automotive Assistance Programme being discussed at a government seminar for manufacturers and supply chain companies.
The vehicle would be designed, developed and produced in the UK, securing production and employment at the company's Halewood facility, where it would be built.
Mandelson said: 'The government is fully committed to supporting the UK automotive industry as it moves to a lower carbon future. The project would secure production and employment at the Halewood facility and maintain the design capability for Jaguar Land Rover in the UK. This is an important investment for the future and we are delighted to be able to offer this grant support.'
The grant is subject to approval from the European Commission. Government officials will now be working closely on this with the Commission.
The company hopes to launch the car in 2011. It will offer greener stop-start capabilities, while a future hybrid version will deliver around 120g/km.
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