Jaguar and Land Rover, now owned by India's Tata (NYSE: TTM - News) group, are drawing up a new business strategy that will take both brands upmarket into the £100,000-plus pricing territory currently occupied by only a handful of luxury carmakers such as Bentley.

David Smith, the newly installed permanent chief executive of both companies, said the brands could be taken "a lot further up the market".

"Both Jaguar and Land Rover, through the Range Rover brand, should be able to produce very credible products to appeal to people in those markets," he told the Financial Times.

Mr Smith was speaking after a visit this week to the British-based companies by Ratan Tata, the Indian group's chairman, for the second time since Tata bought Jaguar and Land Rover for $2bn in April.

At that time, Tata committed to supporting the current business plan, which runs for the next two and a half years and includes the replacement for the flagship XJ saloon range to be launched late next year.

But Mr Tata, who was shown further prospective projects during this week's visit, was now "very enthusiastic" about the companies' wider long-term potential, Mr Smith said.

He thought it too early to set out details of any assault into the market for cars costing £100,000 or more, which has already proved a fertile area for Aston Martin - of which Mr Smith is a former director - and Bentley.

Bentley sales rose above 10,000 units for the first time last year and Aston Martin expects to cross a similar threshold next year.

Executives at Jaguar and Land Rover say they believe much of the potential market for cars costing more than £100,000 lies in China, the Middle East, Russia and other fast-developing markets.

"The number of high net worth individuals in these markets is increasing exponentially and they now have the ability and desire to buy such vehicles," said Mr Smith.

"To be honest, even now we sometimes can't produce vehicles with enough in them in terms of luxury to satisfy such customers," he added.

The most expensive Jaguar model, its Daimler saloon, has a list price of £80,000, but the majority of Jaguar's range is much cheaper, at between £25,000 and £75,000.

However, there are no plans to replace Jaguar's cheapest model, the X-Type.

This would leave Jaguar with entry-level pricing of about £35,000 for the recently launched XF range.

Land Rover's most expensive model, the supercharged Vogue SE Range Rover, costs £72,000.

In spite of the fuel price- and credit crunch-driven downturn in luxury car sales in North America and Europe, Mr Smith forecast that Jaguar's global sales this year would remain unchanged on 2007, at about 60,000 units, and Land Rover's at about 226,000, thanks to strong growth in China and other expanding markets.

"It might be down in the US but in China, the Middle East and Russia it's booming. While the market's hard, it's not too hard," he said.