Government invests £27m in "green" Land Rover design

The idea of building a green Land Rover might not sound that radical given the target audience of the vehicle normally favour a colour scheme that will match their Hunter wellington boots.

But the latest announcement from the car maker, backed by the UK'S Department for Business Enterprise and Regulatory Reform, actually concerns the environmental impact of the iconic 4x4 rather than its paintwork.

Business secretary Lord Mandelson announced this week that up to £27m of " government support" will be made available to Jaguar Land Rover for the production of a new car based on the company's LRX Concept.

"The government is fully committed to supporting the UK automotive industry as it moves to a lower-carbon future. This project aims to design and build a greener car in the UK, safeguarding vital skills and technologies," said Mandelson.

Land Rover, currently owned by Indian car maker Tata, first announced details of its LRX Concept Car at the Detroit Motor Show in 2008. The LRX design is a more compact approach than previous Land Rover models and will include a more energy-efficient engine, the company claims.

"The LRX concept also adopts intelligent power management systems first seen in the LAND-e concept, such as ERAD electric rear axle drive, and is conceived as a hybrid two-litre turbodiesel, with bio-diesel facility. This could offer fuel consumption of about 60mpg (UK gallon)/49.9mpg (US gallon) and the potential to reduce CO2 emissions to about 120g/km, " Land Rover states.

Land Rover says it is committed to investing £700m in sustainable technology over the next five years despite the dire cashflow problems of auto industry. Tata is not struggling as badly as US car makers, but some commentators claim that a luxury brand such as Land Rover could be dragging down the company's performance in the current economy.

The UK government says that up to £27m is on offer from the Grant for Business Investment scheme to support the LRX design. BERR was also at pains to point out that this investment was "separate from the £2.3bn Automotive Assistance Programme" – the government's auto industry bailout package.

The LRX vehicle would be designed, developed and produced in the UK, securing production and employment at Land Rover's Halewood facility.

"The project would secure production and employment at the Halewood facility and maintain the design capability for Jaguar Land Rover in the UK. This is an important investment for the future and we are delighted to be able to offer this grant support," added Mandelson.