Jaguar Land Rover to open factory in Slovakia
Slovakia overbid rivals such as Poland, Hungary and Mexico to build a 300,000 car-per-year plant, which comes as the premium car maker is looking to lower its cost base to compete with larger German rivals, the Financial Times reported.
JLR, owned by India’s Tata Motors, said on Tuesday that it had signed a letter of intent with the Slovakian government to build the factory in the western city of Nitra, as first reported by the Financial Times.
The first cars out of the factory gates, to be from JLR’s new aluminium product portfolio, will probably begin production in 2018. The carmaker will invest about £1bn in the factory, a person with knowledge of the details told the FT.
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| Jaguar Land Rover sign declaration of intent with Slovakian government |
The new plant, which is subject to a final feasibility study, would be the company’s first in lower-cost eastern Europe, where many of its luxury rivals, such as Porsche, already build top-range cars.
That would mark a shift in strategy for Britain’s biggest automotive employer, following the opening of plants in China and Brazil that were chosen primarily for local market access, not cost advantages.
The car maker has three car factories in the UK and one engine plant, but almost all are running at or close to full capacity. The company is on target to build 500,000 vehicles this year, up from 460,000 in 2014.
The company's long-term target is to close the volume gap with the big three German premium carmakers — Audi, BMW and Mercedes-Benz — which each sell close to 2m cars a year, a goal that will require a larger and more global production footprint.
Ralf Speth, JLR chief executive, said that Slovakia’s history as a production site for other premium carmakers swung the decision in its favour.
“The expansion of our business globally is essential to support its long-term, resilient growth. As well as creating additional capacity, it allows us to invest in the development of more new vehicles and technologies, which supports jobs in the UK,” Mr Speth said, stressing the company’s commitment to building cars in Britain.
The investment will probably bring in thousands of new jobs.
Source: Financial Times
