Jaguar Land Rover has announced it will build a new engine at its manufacturing plant near Wolverhampton.

The move will see in-house designers and engineers build the new three-litre petrol unit at its £1 billion Engine Manufacturing Centre on the outskirts of the city, expanding its 'Ingenium' family of engines.

The engine will first be used in the Range Rover Sport and provide a welcome boost to the company which has been dogged by negative headlines in recent weeks.

Last month, JLR confirmed it was planning to cut 4,500 jobs, thought to be coming mainly from its West Midlands operations, and last week the luxury car brand posted a quarterly pre-tax loss of £273 million while car sales were down by nearly 10,000 units.

This new engine is claimed to be 20 per cent more fuel efficient than the V6 petrol engine it replaces.

Nick Rogers, executive director of product engineering, said: "From the outset, we always intended Ingenium to be a full family.

"That is why we chose to engineer our own flexible engine architecture to meet our bespoke needs, allowing Jaguar Land Rover to adapt and stay ahead of changes in regulation and technology.

"This second wave of engines is engineered to be cleaner and more efficient than ever before."