Tata-owned Jaguar Land Rover will build an engine plant in the Midlands, in the UK, at a cost of 400 million pounds, which could potentially create up to 2,000 jobs, as per media reports.
In a report published Sunday, The Sunday Telegraph reported that JLR could announce the engine plant as early as Monday alongside UK Business Secretary Vince Cable and it has secured financial support from the government to bring the plant to the UK.
JLR's engines are currently supplied by Ford's plants, including Bridgend and Dagenham, based in the UK.
However, the car-maker now wants greater control over engine production as sales boom in Asia.
It is also considering an engine plant in India, the report said.
The engine plant will be based at the i54 business park in Wolverhampton, which has been made an enterprise zone.
According to the report, the UK's coalition government has offered around 10 million pounds of financial support for the JLR plant, although it is not clear what form this will be in.
The plant is likely to take around two years to build and could eventually employ up to 2,000 workers, the report said, quoting a source close to the negotiations.
JLR's fortunes have undergone a dramatic transformation under the ownership of Tata Motors, which bought Jaguar and Land Rover from Ford in 2008.
Under the leadership of chief executive Ralf Speth and Tata Chairman Ratan Tata, JLR is investing 1.5 billion pounds a year on new products and has ambitions to ramp up production at its three Midland plants to 500,000 vehicles a year.
The company has already hired 3,000 staff this year, including a record 350 graduates, and now employs almost 21,000 people in the UK.