Page last updated at 17:00 GMT, Friday, 27 February 2009

Jaguar seals 'significant' order

Jaguar, Land Rover logos
Jaguar Land Rover has already cut output because of falling sales

Jaguar Land Rover has announced a deal to supply a Chinese company with 13,000 vehicles, providing a dose of good news for the beleaguered UK car industry.

Jaguar said it was "a very significant" order, and was particularly welcome at "this challenging time".

The order, for both Land Rover and Jaguar cars, comes as many carmakers have cut jobs after falling sales.

Jaguar, which has plants in Solihull and Halewood, has asked staff to take a one-year pay freeze and four-day week.

Staff will vote on the move next week, which would guarantee no compulsory job cuts.

Three-year deal

Based in Gaydon, Warwickshire, it employs about 15,000 people in Castle Bromwich, Coventry and Solihull in the West Midlands and Halewood, Merseyside.

Jaguar Land Rover, which is owned by India's Tata Motors, said it had signed a memorandum of understanding to supply the vehicles to one of its major business partners in China over a three-year period.

China was the company's fifth-largest market. Last year, it sold 2,000 Jaguars and 11,000 Land Rovers there.

Car sales in China, as elsewhere, have fallen, but the slump has been less severe than in the UK and US.

In December, China leapfrogged the US to become the world's largest car market, after figures showed there were more cars sold in China than the US that month.

Meanwhile, Rolls Royce has signed a $1.2bn (841m) agreement to supply airline engines to China's Hainan Airlines.

Rolls Royce will supply engines for 20 Airbus A330 aircraft and carry out services on the equipment, the company said.

The deal was signed as Business Secretary Lord Mandelson met China's commerce minister, Chen Deming, in London.

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