Land Rover Secures $38 Million Grant From UK Government to Build LRX

Land Rover is now poised to bring a new entry-level crossover model to market thanks to a grant from the British government. The U.K. government has confirmed a £27 million ($37.9 million) cash infusion towards a vehicle that would be based on the Land Rover LRX Concept.

The LRX was first displayed at the North American International Auto Show (NAIAS) in Detroit in 2008. The concept car features a 2.0-liter turbodiesel hybrid powertrain, allowing it to get 30 percent better fuel-economy over comparably-sized SUVs and crossovers.

The stylish LRX may be more compact that other Land Rover vehicles – measuring 5.9-inches less in length than the LR2/Freelancer and 8.1-inches lower in height – but it will still be a premium vehicle.

The production model would be the lightest and most fuel-efficient model Land Rover has ever produced.

When the concept was first shown in Detroit, Land Rover’s managing director, Phil Popham said that, “The LRX concept delivers the powerful message that we are as serious about sustainability as we are confident about the continuing relevance and desirability of our vehicles. LRX is in every respect a Land Rover, but it’s a very different Land Rover.”

“LRX has unmistakable Land Rover design and the breadth of capability that you’d expect from our vehicles. But it carries those essentials into a segment where the brand has never been before, and with a proposed level of efficiency that would make it one of the cleanest vehicles in its class. It is Land Rover’s way of affirming the brand’s responsible approach to future product development.”

The final decision on the project has yet to be made by Land Rover on the new model and while the $37.9 million grant helps, the expected cost of bringing this new vehicle to market is $560 million. Land Rover is expected to announce its decision to go ahead on the project later this year at the company’s Halewood plant.

Official release after the jump:

PRESS RELEASE:

LAND ROVER CONFIRMS GRANT OFFER TO BUILD NEW MODEL

Gaydon, Warwickshire, 11 March 2009

The UK Government has confirmed a grant offer of up to £27 million is to be made available to Land Rover for the production of an all-new car. The company is due to make a final decision on the the go-ahead of the project at its award-winning plant in Halewood, on Merseyside, later this year.

The car would be based on Land Rover’s acclaimed LRX Concept vehicle, first shown at the Detroit Show last year, and would be the smallest, lightest and most efficient it has ever produced.

“We welcome the Government’s support for this project, which would form a key part of our future product plans and which we very much want to put into production,” said Phil Popham, Managing Director of Land Rover.

The grant offer will be made available under the Government’s Grant for Business Investment scheme and is an important contribution towards the overall £400 million cost of the project. This is separate from the broader automotive support package currently being unveiled by the Government.

Although it still has to go through a number of approval gateways in the product development process before getting the final go-ahead, Land Rover has also confirmed that the new car would be a key addition to the Range Rover family of luxury vehicles.

Phil Popham said, “Our engineering feasibility study has shown that we can very successfully deliver Range Rover levels of quality, drivability and breadth of performance in a more compact, more sustainable, package. Feedback from the most extensive customer research we have ever undertaken also fully supports our belief that a production version of the LRX Concept would further raise the desirability of our brand and absolutely meet all those expectations.

“It would be the smallest, lightest and most efficient Range Rover that we’ve ever built,” Phil added. “The compact size, lighter weight and sustainability-focused technologies of the LRX Concept showed how Land Rover is planning to respond to the needs of a changing world. Despite the current economic challenges, we remain committed to investing for the future, to continue to deliver relevant vehicles for our customers, with the outstanding breadth of capability for which we are world-renowned.”

The new Range Rover would embrace excellent levels of refinement and all-round capability and also introduce new powertrain options, providing a major step forward in enabling the implementation of Land Rover’s e-terrain technologies strategy and achievement of its goal to exceed a 20 per cent improvement in CO2 emissions.

“Both the design and size of the LRX Concept have generated a hugely positive reaction wherever it has been seen and we’ve also gathered fresh insights on what potential owners would look for in a production equivalent. That knowledge is now being applied to the process of refining the vehicle as it heads towards final approval,” said Phil.

The Halewood facility employs 2000 people and is a recipient of the J.D. Power Gold Standard. It currently produces the Land Rover Freelander 2 and Jaguar X-TYPE.