Birmingham's beleaguered manufacturing sector received a welcome boost yesterday when the first of Jaguar's new XK sports car came off the production line at the company's Castle Bromwich factory.

The roll-out of the first production car ensured that 2005 ended on a high note following a gloomy year that has seen the collapse of MG Rover and the closure of Longbridge as well as recent problems at vanmaker LDV.

The new XK, which will go on sale around in the world next spring, is a vital new model for Jaguar, whose sales have dipped by about a fifth this year as the luxury car market has shrunk.

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The aluminium-bodied car is described as the "most technically and technologically advanced Jaguar ever".

But a company tradition was maintained yesterday when the first production car, a Liquid Silver 4.2 V8 XK Coupe, was handed over to the Jaguar Daimler Heritage Trust which holds the first and last production models of every Jaguar ever made.

Once off the track it was parked between two iconic Jaguars of the past - a 1956 D-Type driven by racing legend Mike Hawthorn, and a 1961 prototype E-Type.

Jaguar managing director Bibiana Boerio said: "The launch of a new Jaguar sports car creates momentum, excitement and a buzz that marks an historic step in the company's revitalisation plans. There has been a tremendous response from all around the world to the launch of the XK."

The launch of the XK represents that final phase of a major expansion of the Castle Bromwich factory. The home of the S-Type has been stripped out and extended to accommodate the transfer of both the XK and the range-topping XJ saloon from the Browns Lane site in Coventry where car production has now ceased.

The X-Type, is made at the ex-Ford Escort factory at Halewood, which from next year will also produce the new Land Rover Freelander.

Richard Mcdonnell, plant launch manager at Castle Bromwich, said the transfer of production from Browns Lane had been one of the biggest projects of its kind ever attempted in the car industry.

"I can't think of a project as big as this in a continuous-build environment, because while the new lines were being installed and 1,200 personnel changes were taking place, S-Type production never stopped and the paint shop carried on as normal," he said.

XK programme director Russ Varney said: "We have talked to our customers and dealers and they all said the new car looks like a 21st century sports car that combines power with luxury - exactly what Jaguar is all about."

Plant director John Naughton said the creation of the aluminium-bodied XK was a "significant manufacturing accomplishment". The convertible version of the XK will be unveiled at the Detroit Motor Show in January.