Tata is expected to invest up to £1 billion in Jaguar and Land Rover over the next four or five years as it takes charge of its first major Western brands.

The investment is virtually the same as the £1.15 billion that the Indian conglomerate paid yesterday to take control of the two renowned British marques. The investment will honour Ford's business plans and lead to two new models for both brands.

Tata, which makes vehicles in India, including the world's cheapest car, and which owns Corus, the Anglo-Dutch steelmaker, as well as Tetley's Tea, promised to maintain the British nature of the companies.

Ratan Tata, the chairman, said: “We have enormous respect for the two brands and will endeavour to preserve and build on their heritage and competitiveness, keeping their identities intact. We aim to support their growth, while holding true to our principles of allowing the management and employees to bring their experience and expertise to bear on the growth of the business.”

Some industry commentators believe that Tata's long-term strategy is to make Jaguar and Land Rover much bigger enterprises to compete on the world stage with the likes of Audi. However, this suggestion has been dismissed by a close adviser.

Ford, the American carmaking giant that put the brands up for sale after racking up record losses globally, will retain a long-term link with the businesses through engine and component supply. Some of the engine supply deals run beyond 2015.

Roy Kishor, senior automotive partner at Kroll, the risk management group, said that Tata might try to replicate the Jaguar and Land Rover operations in India after a few years, while maintaining the British operations.

He said he believed that in the short term the Indian company would use technology from the two marques to improve its Indian vehicles, especially in four-wheel-drives, to position Tata as a contender to Mahindra & Mahindra in this segment.

Garel Rhys, of Cardiff University Business School, said that Tata could consider duplicate manufacturing. Production of the Land Rover Defender could be moved to India in the short term because it is the oldest design in the range of vehicles, he said.

Professor Rhys said that a move overseas should not be seen as failure: “It is a mark of success if a product made in the UK is made elsewhere. We have a very negative way of looking at these things.”

If Tata increased production to one million cars from the two brands, up from the present level of nearly 300,000, it could take on the likes of Audi, BMW and Mercedes in the luxury end of the market.

But Lord Bhattacharyya of Moseley, professor at Warwick University and an informal adviser to Tata, said he doubted that the two brands would ever be made outside the UK. “These are niche, iconic models and I would expect them to remain niche. I think 350,000 to 400,000 is as far as Tata would want to take volume. The technology is here, the research and development is here. I think the manufacturing will remain here.”

Jaguar was founded in 1922 and despite its difficulties through the years it has been a byword for premium motoring. The first Land Rover was designed in 1948 and the brand became the first to produce commercial off-road vehicles.

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