Jaguar Land Rover, maker of Range Rover 4x4s and sportier luxury saloons, will drive the initial models on a new 41-mile (66 km) test route on motorways and urban roads near its headquarters and plants in central England.
The market for autonomous driving is worth GBP 900 billion ($1.29 trillion or roughly Rs. 86,63,473 crores) worldwide, according to the government, but needs to overcome legal obstacles including determining who would be responsible in the event of an accident.
Britain announced plans in March to test cars on motorways and launched a consultation on Monday to change insurance and motoring rules as it pursues plans to allow the public to use driverless cars on the streets by 2020.
Jaguar Land Rover's Head of Research Tony Harper said the firm's technology, which includes a three-dimensional advanced view of the street ahead to recognise barriers and radio signal communication between cars, could reduce hazards.
"Our connected and automated technology could help improve traffic flow, cut congestion and reduce the potential for accidents," Harper said.
Carmakers are ploughing billions of pounds into autonomous technology with Ford already part of a government-sanctioned autonomous testing project in England and Volvo planning to test driverless cars in London next year.
Japan's Nissan aims to build its first mass-market autonomous car at its north of England facility in Sunderland, Britain's biggest single car plant.
However, traditional automakers face competition from rivals such as Tesla and technology firms such as Alphabet Inc unit Google, which wants eventually to be able to deploy fully autonomous vehicles without human controls.
In Britain, driverless car testing will need a person to be present and able to take control should the need arise, the Department for Transport has said.
© Thomson Reuters 2016