Ford is expected to tell trade unions on Friday that it will close its Jaguar factory in Coventry, according to the BBC.

The Brown's Lane plant employs 2,000 people and is used to finish off XJ saloon cars and XK sports vehicles.

However, the company said no decision had been made yet, but said it was considering all possible options.

Jaguar has seen demand for its models drop in the US, a key market, and has been looking at how to reduce costs.

"We don't want to discuss speculation," says a spokesman for Jaguar.

"But we are in the process of developing a plan to secure Jaguar's long-term future. Nothing has been ruled out."

Ford recently considered closing its Land Rover plant in Solihull, Birmingham, only to reach agreement with unions on a plan to make it more competitive and safeguard 8,000 jobs.

Jaguar cars are made at three sites in the UK and all have been producing at less than capacity.

The other two plants are at Castle Bromwich, in the West Midlands, and Halewood on Merseyside. The dollar's current value against sterling makes it almost impossible to sell Jaguar cars in the US, which accounts for 50% of their market.

Ford reported a $362m (£203m) second-quarter pre-tax loss for its Premier group, which includes Jaguar as well as Land Rover, Aston Martin and Volvo models.

(Source: bbc.co.uk)