Tata Motors-owned luxury carmaker Jaguar Land Rover has signed an agreement with Austrian contract car manufacturer Magna Steyr for manufacturing vehicles.

As JLR’s existing European plants — all based in Britain at Solihull, Halewood and Castle Bromwich — come close to full capacity, the agreement, under which some future vehicles would be produced by Magna Steyr in Austria, should help relieve pressure and provide flexibility, enabling it to meet demand and future growth.

Chief Executive Ralf Speth said the agreement with Magna Steyr, which produces cars in Graz, Austria, did not impact its British operations, which remain at the centre of its design, engineering and manufacturing operations.

“Today marks another step in building our global footprint,” he said in a statement.

JLR has been expanding its global manufacturing and assembly base in the last few years.

Alongside the assembly plant in Pune, it also produces the Range Rover Evoque in China and is building another manufacturing plant in Brazil, where from early next year it is set to start producing the Discovery Sport.

It also opened its first engine manufacturing centre last year in Britain employing around 1,400 people.

The company is yet to announce what vehicles would be manufactured in Graz.

It has plans to spend £3.6 billion on new products and capital expenditure in the year ending 2016, during which period it will release 12 new products (from new vehicles to refreshed versions of existing lines).

It is targeting 50 new products in the next five years.

Magna Steyr, a subsidiary of Magna International, has a long history of partnering with vehicle manufacturers in production, including with Mercedes-Benz on the G-Class and BMW on the BMW X3, MINI Countryman, and MINI Paceman vehicles.

It has produced over 2.5 million vehicles in 22 models to date.