Jaguar Land Rover (JLR) has announced it is setting up a new engine production unit in the Midlands at a cost of £355 million.
Work on the new Wolverhampton facility is scheduled to begin next year, as a revitalised JLR bids to make its own low-carbon engines for future cars.
The car maker currently relies on Ford engines produced in Bridgend and Dagenham for its vehicles.
The new plant is expected to create 750 jobs, adding to the nearly 21,000 workers the company already employs in the UK.
JLR has stepped up its recruitment drive in line with its expansion plans, as it enjoys a resurgence in car sales driven by rising demand worldwide, particularly in emerging Asian markets.
So far this year the company has recruited 3,000 workers, including a record 350 graduates.
Dr Ralf Speth, JLR chief executive, said: "We expect the engine manufacturing facility to create up to 750 highly-skilled engineering and manufacturing posts at Jaguar Land Rover, along with hundreds more highly-skilled manufacturing jobs in the supply chain and the wider UK economy."
A new factory in India is also under consideration.
Three new concept vehicles, including a revamped Defender and a two-seater sports car, were unveiled by JLR at the Frankfurt Motor show last week.
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