Tata Motors-owned Jaguar Land Rover (JLR) is considering a major expansion plan at its UK factory which could create as many as 1,000 jobs.
The company has singled out its Halewood factory in Merseyside, north-west England, for the latest investment injection as a result of rising demand for the Range Rover Evoque as well as a rollout of new models.
JLR chief executive Ralf Speth plans to launch 40 new models in the next five years and aims to double car sales to 750,000 by 2015.
According to a report in The Sunday Times, it is believed the company is also eyeing plans to expand its Solihull factory in the West Midlands to cope with new Jaguar launches.
The Indian car maker employs 24,000 workers in the UK and is one of the country's biggest exporters.
In May, it revealed record annual pre-tax profits of £1.7 billion, and last week reported a 29% rise in first-quarter profits to £304 million.
A source told the newspaper that the plan to extend capacity at Halewood, which has 4,500 workers, was well advanced.
It will be funded from the £2.7 billion that JLR set aside for capital expenditure in the current financial year.
However, the announcement on the investment has been delayed by the threat of an imminent strike by DHL workers, who deliver parts to the car maker's production lines.
"It is not going to derail the investment because this is going to build capacity for the next five years. It is just difficult to green light the investment until the DHL situation has been resolved," the source was quoted as saying.
As well as providing a boost for Britain's burgeoning car industry, the Evoque is also set to keep Chinese car workers busy.
It is expected to be the first vehicle to roll off the production line at JLR's Chinese joint venture with Chery in 2015.
In 2008, the Jaguar Land Rover company was established when Tata Motors acquired the Jaguar and Land Rover businesses from Ford.