Ford announced on Friday that its PAG brand, Jaguar, would cease car production at the historic Brown's Lane plant in Coventry - and that the marque's F1 team will be sold to the highest bidder.

The Dearborn, Michigan-based multinational said that while most of the employees would be transferred to neighbouring plants, 310 workers would remain at Brown’s Lane Coventry plant to produce Jaguar's polished veneer finishes.

Jaguar's F1 team, which was established when Ford bought out Stewart Racing at the end of 1999, will cease operations at the end of the 2004 season. Ford said it would sell the Jaguar F1 team and won’t be rebranding it as Ford, as had been widely expected.

Since Ford will also no longer subsidise British-based Cosworth engineering, the current supply of engines to the Minardi and Jordan F1 teams have also been thrown in doubt.

The axing of the Jaguar team will apparently save its parent company an estimated R1,18 billion per year. The personnel cuts and scrapping of the F1 team could save the company an estimated three billion rand a year.

Geoffrey Robinson, former Jaguar chief executive, said the demise of the Brown's Lane plant was a "very grim day" citing global business conditions as the primary cause, since this had made British-built cars relatively expensive on the US market.

On the positive side, Jaguar said it would be developing three new products - a diesel XJ, a high-performance X-type diesel and a new all-aluminium sports car.

Brown's Lane, regarded as Jaguar's "spiritual home", will remain the company's headquarters.