Jaguar Land Rover (JLR), part of Tata Motors, plans to to set up a new plant and will be recruiting about a thousand engineers over the coming months.

The company, acquired by Tata Motors from Ford Motor Company in 2008, announced record sales earlier this month. In the UK, it sold the highest number of Land Rovers in its 63-year history, while sales in India and China were up by 61 per cent and 33 per cent respectively.

Jaguar also announced its best-ever sales in India in March, besides a 70 per cent jump in Russia and 49 per cent in Germany.

According to Phil Popham, group sales operations director, despite a challenging business environment, ''JLR is flourishing on a global scale with March sales reflecting the confidence consumers have in our brands and products.''

The company, which is expected to make a £1-bn profit in the year to March, has already scrapped earlier plans to close a plant in the Midlands.

Ralf Speth, CEO, JLR, said recently the company would invest £1.5 billion every year over the next five years on product development. ''JLR is in the catch-up stage and we are going to do whatever we can to position ourselves in the top premium brand,'' he said.

Unconfirmed reports say that JLR is also considering the possibility of putting up a new engine plant and has identified three sites, one of which is in India. An announcement about the new plant is expected next month. It has already been exploring using Indian vendors to supply auto parts, to bring down costs compared to those supplied by parts suppliers in the West.

JLR employs 18,000 people globally, of which 17,000 are in the UK. Its employee count is expected to rise to 20,000 by 2012. The company cut its workforce during the 2009 recession, reducing it to 14,500.

The decision not to close down its plant in the Midlands – which would save about 7,000 jobs – has been welcomed in the UK, especially within the government. Vince Cable, the UK' s business secretary, last month went around one of JLR's plants along with CEO Speth. He also praised the company for awarding £2bn worth of contracts to local businesses.

Britain's auto industry is also reviving after nearly 20 years of decline. Production shot up 20 per cent in 2010 to 1.4 million vehicles. About 75 per cent of the vehicles built in the UK are expected, bringing in £5 billion a year.

JLR currently sources its engines from Ford plants in the UK, but the company now wants to set up its own plant for engines.