Land Rover has just sent me a press release confirming that the UK Government has offered the company a massive grant of up to £27 million under the Grant for Business Investment scheme. This is to be made available to Land Rover for the production of an all-new mini SUV based on the LRX Concept vehicle, first shown at the Detroit Show last year.

The company is due to make a final decision on the the go-ahead of the project at its plant in Halewood, on Merseyside, later this year.

Land Rover says "We welcome the Government's support for this project, which would form a key part of our future product plans and which we very much want to put into production,"

This is only a small chunk of the estimated £400 million cost of the project.

Although it still has to go through a number of approval gateways in the product development process before getting the final go-ahead, Land Rover has also confirmed that the new car would be a key addition to the Range Rover family of luxury vehicles.

Phil Popham Land Rover's Managing Director said, "Our engineering feasibility study has shown that we can very successfully deliver Range Rover levels of quality, drivability and breadth of performance in a more compact, more sustainable, package. Feedback from the most extensive customer research we have ever undertaken also fully supports our belief that a production version of the LRX Concept would further raise the desirability of our brand and absolutely meet all those expectations."

"It would be the smallest, lightest and most efficient Range Rover that we've ever built," Phil added. "The compact size, lighter weight and sustainability-focused technologies of the LRX Concept showed how Land Rover is planning to respond to the needs of a changing world. Despite the current economic challenges, we remain committed to investing for the future, to continue to deliver relevant vehicles for our customers, with the outstanding breadth of capability for which we are world-renowned."

The new Range Rover is planned to "embrace excellent levels of refinement and all-round capability and also introduce new powertrain options, providing a major step forward in enabling the implementation of Land Rover's e-terrain technologies strategy and achievement of its goal to exceed a 20 per cent improvement in CO2 emissions."

Does anyone else think that this is an awful lot of money being pumped into a car that belongs in a segment that just isn't selling?