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Jaguar Land Rover considers manufacturing in Saudi Arabia

image captionThe new Jaguar F-Type

Carmaker Jaguar Land Rover (JLR) is considering building cars in Saudi Arabia, it has said.

If it went ahead, it would be the Indian-owned company's second overseas manufacturing plant. It agreed to build a plant in Shanghai last month.

At this stage, an agreement with Saudi Arabia is limited to a letter of intent to start a feasibility study.

The company told the BBC that any new plant in Saudi Arabia would not lead to job losses in the UK.

JLR said overseas production would come in addition to the work done in the UK.

It has not yet decided whether Jaguar or Land Rover models would be best suited for such production.

The West Midlands-based luxury carmaker agreed a £1bn deal with Chinese manufacturer Chery Automobile last month.

The two plan to build a plant near Shanghai, which is due to open in 2015, to try to take advantage of the fast-growing market for cars in China, where sales of Jaguar Land Rover's vehicles have risen 80% in the past year.

JLR also has an assembly plant in Pune, India, where pre-manufactured parts are put together.

'Business case'

It is the construction of the world's largest aluminium smelting facility in Saudi Arabia that has attracted JLR's parent company Tata Motors to the kingdom.

Jaguar Land Rover relies on the lightweight metal aluminium for the manufacturing of its vehicles.

The smelter is a joint venture between Alcoa and the Saudi Arabian Mining Company, which combines mining, refining and production of the metal in one facility.

It is expected to produce the lowest-priced aluminium in the world when it starts work.

In an interview with Autocar India earlier this year, the chairman of Tata motors, Ratan Tata said: "This smelter could make the production of aluminium in Saudi Arabia very competitive."

"So taking a really long-term view, if we put an assembly plant there with a large press shop, given our commitment to aluminium in our products, we could have an interesting business case, which we are examining today."

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