The Tata-controlled British automobile firm Jaguar Land Rover is set to receive 800 million pounds in support from the UK government as part of a massive bailout worth £2.3 billion of Britain’s ailing car industry, sources close to the development told Hindustan Times.
Of this, about £300million will be a loan from the European Investment Bank underwritten by the British government. The remaining £500million will come in the form of a tax-payer-backed loan guarantee, the sources said.
A formal announcement is scheduled to be made by the European Investment Bank after its board meeting next Tuesday.
This will bring much relief to 15,000 people employed by Jaguar Land Rover in British factories.
As much as £500 million of the credit for Jaguar Land Rover is aimed at keeping the company afloat, while the remainder will support research and develop environmentally-friendly technology.
These announcements are in conjunction with other incentives to kick-start the car market, like new car buyers are to receive up to £2,000 from the taxpayer for dumping their old vehicles.
Tata Motors had acquired JLR, with two of Britain’s iconic luxury far brands, last June for about $2.3 billion. JLR is now a 100 per cent subsidiary of Tata Motors which Jaguar Land Rover was the first to be given the green light for £27million, subject to EU approval, to develop a ‘green’ diesel-electric hybrid ‘baby’ Range Rover, codenamed LRX.
Incidentally, all major car factories in the UK are now foreign-owned, and many are close to Labour marginal seats, making bailouts or closures politically controversial.