Jaguar Land Rover, a subsidiary of Tata Motors, has received a grant worth 27 million pounds--more than $37 million--to mass-produce a "green" crossover vehicle.
The car will be a street version--or a more practical variation--of the LRX concept vehicle that Jaguar Land Rover debuted at the Detroit Motor Show in January 2008.
The concept version was a hybrid 2-liter turbo diesel crossover vehicle, combining features of a car and an SUV. The concept got about 50 mpg on average, according to its specs.
Jaguar Land Rover's announcement comes as the U.K. government held a meeting Wednesday with automakers and suppliers to discuss a possible 2.3 billion pound ($3.2 billion) bailout package.
The 27 million pound grant, which is subject to approval by the European Commission, would require that the car be made at Jaguar Land Rover's plant in Merseyside, England.
"The vehicle industry will be central to driving our economy out of recession and employs large numbers of highly skilled individuals producing efficient cars for the global market of the future. It would be an absolute tragedy to lose these skills," David Frost, director general of the British Chambers of Commerce, said in a statement.
The news follows a recent announcement from Jaguar Land Rover that it will be shifting to a four-day work week and a pay freeze as part of an agreement with unions to avoid layoffs.