After the Tata Nano, it’s Jaguar-Land Rover’s turn to think small. First shown in Detroit Auto Show last year, Land Rover’s acclaimed LRX concept vehicle is the “smallest, lightest and most efficient” vehicle Land Rover has ever produced. And now the UK government has pitched in, promising a generous grant up to $37 million if the concept becomes a road reality. This is separate from the $1.25 billion that JLR will reportedly get as part of the overall broader automotive support package, which has been announced by the British government.

Despite the grant, though, developing the new car will not come cheap. The overall project cost will be around £400 million and the grant covers less than 10% of that. But the grant offer made available under the UK government’s ‘grant for business investment scheme’ will definitely help. JLR officials say, it will be an “important contribution towards the cost of the project.”

Although the project has not yet got the final go ahead from the company, JLR officials have confirmed that the new car will join the Range Rover family. Lightweight and kitted out in sustainable technologies, the LRX Concept was Land Rover’s answer to the current economic challenges offering better mileage, lower emissions and more thrifty design and engineering cues. But the new Range Rover will also offer excellent refinement complete with a new engine and transmission. That’s crucial since it will help Land Rover achieve its goal of exceeding a 20% improvement in CO2 emissions.