Luxury car maker Jaguar Land Rover today unveiled plans to build a new £355 million production plant on the edge of the M54, creating 750 jobs.

The new factory will be based at the i54 business park, near junction two of the motorway, after the company’s owners, Tata, chose the West Midlands ahead of an alternative site in India.

Jaguar Land Rover chief executive Dr Ralf Speth said the factory, on the western edge of Wolverhampton, would build high performance, low emission, four-cylinder engines.

Building work is due to start early next year. He said: “This is truly exciting news, and is a major commitment for our company.”

Jaguar and Land Rover engines are currently supplied by Ford from plants including Bridgend and Dagenham in the UK.

But the car maker wants to take greater control of its engine production as sales boom in Asia.

Simon Griffiths, chief executive of the Manufacturing Advisory service in the West Midlands, said it was excellent news for Shropshire component suppliers.

“In addition to hundreds of direct jobs that will be created, there will also be countless opportunities for the supply chain to benefit from more local sourcing.

“The new plant will almost certainly mean new engine models and there will be significant potential for Shropshire firms.”

Business Secretary Vince Cable, who today visited the firm’s Solihull site with Deputy Prime Minister Nick Clegg, said the project would bring a ‘significant economic boost’ to the West Midlands.

“This announcement sends out strong signals to potential inward investors across the world and is a huge vote of confidence in our successful automotive sector.”

Dr Speth paid tribute to the ‘strong support’ from the Government, trade unions, local MPs, local authorities and the company’s own employees.

By Thom Kennedy and Sunita Patel