Land Rover is expected to spin off its logistics division, which employs 770 staff, as part of an efficiency drive designed to secure future production at its Solihull plant. Ford, which owns the off-road specialist, needs assurances Land Rover can improve efficiency before guaranteeing production of future models. Jaguar underwent similar restructuring at its Castle Bromwich factory a few years ago.

Land Rover says a “routine meeting” held last week with unions discussed a number of initiatives to improve efficiency at the Solihull plant, which employs 8500 people. The talks included the future of the parts logistics operations, but a spokesman says every attempt will be made to re-employ staff elsewhere within the company. He adds that no decision has been finalised to spin off the division.

“There is huge production capacity within Europe so we have to be efficient to attract new products,” says the spokesman. Unions confirm they are in talks with the carmaker, but that negotiations would be “long and difficult”.

The talks coincide with the launch of a significantly revised and upgraded Discovery this month. The Discovery has been Land Rover's most popular model, selling around 11,500 units last year in the UK. The company hopes for similar sales in 2003.

The new model is priced the same as the outgoing version, despite featuring more than 700 improvements, including the adoption of new headlights that give it a clear visual link with the all-new Range Rover.

Other changes include new tail lights, new interior trim and colours, plus revised suspension and brakes. A centre differential lock to improve off-road capability has been re-introduced at the request of customers. Prices start at £21,995 for TD5 E, rising to £34,490 for the V8 ES.