Tata Motors will manufacture Jaguar Land Rover (JLR) luxury cars at a $1 billion plant that it is planning to build in the southern state of Tamil Nadu, two sources with direct knowledge of the matter said.

The plan would mark the first time that JLR-branded cars would be manufactured from scratch in India.

The cars would be sold domestically and also exported, according to one of the sources, who declined to be identified as the plans were private.

Tata Motors, which acquired JLR in 2008, declined to comment on what it called speculation.

It announced plans for the Tamil Nadu plant in March but did not disclose what vehicles would be manufactured there or the plant’s intended production capacity.

JLR has three car factories in Britain and also builds cars in China, Brazil and Slovakia.

In India, where it sells cars such as the Range Rover Evoque, Discovery Sport and Jaguar F-Pace, it is still very much a niche brand.

The models that are sold in India are exported from Britain as fully built vehicles or in parts that are then assembled at a plant near Pune city.

JLR contributes about two-thirds of Tata Motors’ revenue and in the financial year ended March 2023, the Indian company reported its first annual profit in five years, helped by strong demand for sporty Range Rover SUVs and Jaguar saloons.

The British brand saw retail sales surge 22 per cent globally in the last financial year to nearly 432,000 cars.

In India, where it competes with Mercedes-Benz and BMW, it sold just 4,436 though sales were up 81 per cent from a year earlier on growing demand for luxury goods.

It was not immediately clear which JLR models would be built at the factory.