Britain's battered car sector received a big boost today as the US car giant Ford unveiled plans to spend £1bn in the UK on developing "green" cars.
Seeking to clean up its image as a producer of petrol-guzzling vehicles, Ford is to research the use of lightweight materials, advanced diesel and petrol engines, hybrids and biofuels across its range of vehicles, including Jaguar, Land Rover and Volvo.
"Environmental motoring has to go mainstream", not just be a lifestyle choice for a wealthy minority of customers, the head of Ford Europe, Lewis Booth, said in a statement.
The £1bn will be spent on Ford's existing Dagenham, Dunton, Gaydon and Whitley plants in the UK. Carmakers are developing more fuel efficient cars, rather than SUVs and other heavy vehicles, in response to higher petrol prices.
Today's announcement will come as a much-needed fillip for the UK car industry after the collapse of MG Rover and a decision by the French carmaker Peugeot to stop production at its Ryton plant, near Coventry.
In welcoming Ford's announcement, the transport secretary, Douglas Alexander, said: "There is no bigger long-term challenge facing us than climate change. That is why it is very important for all of us - government, business and individuals - to act. Today's announcement is good news for the environment, British jobs and the wider economy."
Ford said there would be unprecedented cooperation between its 9,500 engineers based at three sites in Dunton, Essex, Coventry and Gaydon in Warwickshire.
Ford reportedly is aiming to produce a Focus model capable of doing 70 miles to the gallon with reduced carbon dioxide emissions.
Today's announcement follows Ford's admission last month that it would fall short of its goal of producing 250,000 hybrid vehicles a year by 2010.
Hybrid vehicles are powered by a combination of internal-combustion engines and batteries that are charged when the vehicles brake.
The Ford chief executive, Bill Ford, announced the hybrid goal last September, saying that gas-electric hybrid engines would be available in half the Ford, Lincoln and Mercury range by 2010.
The goal of 250,000 hybrids a year would have been 10 times the number Ford was building at the time of the announcement. But in an email to employees last month, Mr Ford said the company would focus on alternative fuels instead.
Ford now sells Ford Escape and Mercury Mariner hybrid sport utility vehicles. It has said it plans to introduce hybrid versions of the Mazda Tribute SUV in 2007 and the Ford Fusion and Mercury Milan sedans in 2008.
Meanwhile, the Chinese company that bought MG Rover last year was today unveiling plans to invest in the mothballed Longbridge plant in Birmingham, although production is unlikely to be on a pre-collapse scale, when 6,000 workers lost their jobs.
Nanjing Automobile has already said it will manufacture some MG cars in China and will set up a factory in Oklahoma in the US. About 60% of the 12,000 to 16,000 MG TF coupes to be built annually in Oklahoma will be aimed at North America, and the rest at Europe.
