A deal to see Land Rovers manufactured in Saudi Arabia could be signed within a month, the Post understands.
Rapidly-expanding Jaguar Land Rover is set to sign up for a major manufacturing plant – eventually employing as many as 5,000 people – according to a high-level JLR source.
He said the proposals would see next generation of Land Rover Defenders built in the Gulf kingdom and exported to the Far East and beyond.
The move is part of plans to focus on building cars from aluminium – a resource Saudi Arabia is rich in.
It comes as JLR continues to extend its global reach amid soaring demand in emerging nations, with a factory in China currently being built and proposals for a plant in Brazil.
Speaking of the Saudi Arabia plans, the source said: “It will go ahead. They will make the new Defenders there initially.
“Aluminium is readily available there and the Defender production is stopping here and will be made there.
“The market there for vehicles like defenders is huge, as well as the Far East.”
He added: “It will initially be assembly, but they will make cars as new as it develops.
“It will eventually be four or five thousand people. Saudi Arabia as a country is also working on setting up the supply chain.”
The Gulf kingdom’s industry minister Tawfig Fawzan Alrabiah this week claimed the Midland car giant was exploring plans for a plant manufacturing both Jaguar and Land Rover cars.
The Post reported in 2012 that JLR had signed a letter of intent with authorities in Saudi Arabia which would see the two parties work on a detailed feasibility study to determine the viability of setting up an automotive facility.
The company said talks were at a preliminary stage at the time, although opportunities had already been identified in aluminium component production.
However, JLR declined to comment further when approached by the Post.
A spokesperson said: “We can confirm that a detailed feasibility study is under way to consider Saudi Arabia as a possible future location for a Jaguar Land Rover automotive facility.
“A letter of intent has been signed between Jaguar Land Rover and the National Industrial Clusters Development Programme to determine the commercial viability of setting up a financially sustainable automotive facility.”
Industry expert David Bailey said investment in Saudi Arabia was doubly rise for JLR – as not only is the Middle East a key export market, it is also crucial for supplies of raw materials.
Prof Bailey, who is professor of industrial strategy at the Aston Business School, said: “This would certainly be feasible, not only because of exports but also access to aluminium.
“They have gone for an all-aluminium strategy very clearly and Saudi Arabia is one of the biggest aluminium smelters in the world.
“It gives them access to a lot of aluminium, and a lot of expertise about it.
“There is also big growing demand in and around Saudi Arabia.”
Prof Bailey said that while reports of investment overseas often leads to fears over jobs in the West Midlands, JLR’s growth was sufficient that this does not pose a threat here.
He said: “You could understand why with expansion in China, Brazil and possibly Saudi Arabia, unions are concerned about the UK.
“They are right to ask questions, but this is about the global expansion of the company, which will be in the UK and overseas.
“The company is going to double in size in the new few years, but all of the research and development is still done in the UK.”