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Tata-owned Jaguar Land Rover is pushing forward with its plans to expand production globally, as it selected Slovakia as the home of its first manufacturing plant in mainland Europe, with a capacity to produce 300,000 cars over the next decade.
The premium car maker has signed a letter of intent with the Slovak government and was conducting a feasibility study for the development of a plant near the city of Nitra, in the west of the country. Production could begin in 2018. “A final decision is expected later this year.”
A number of other locations across Europe, the US and Mexico had been examined, but JLR had chosen Slovakia because of its established premium automotive industry and its supply chain and logistics infrastructure, the company said. Though the company is yet to name the first vehicle to be produced in Slovakia, speculation has centered on the Land Rover Defender.
Ralf Speth CEO said that expansion was essential to support long-term and resilient growth. Jaguar Land Rover sold just over 460,000 vehicles last year, but is set to significantly increase production over the next few years, particularly with the higher volume, compact luxury car, the Jaguar XE expected to broaden its appeal to new audiences.
IHS Global Insight predicts group sales could rise to 598,359 by 2016, and to 828,609 by 2020.
JLR would join other carmakers in opting to produce in Slovakia, including Volkswagen, which produces some SUVs, and small city cars in the country, as well as PSA Peugeot Citroen and Kia. “A lot of these will be looking at tapping the European market, while manufacturers such as VW will be looking on a global basis for these vehicles,” says Ian Fletcher of IHS Global Insight.
He said that despite the slowdown in China, the long-term outlook for luxury carmakers remained good, with demand remaining buoyant in Europe and North America and Russia expected to pick up, particularly in the crossover sector. “This is a long play game.”
If it does go ahead, the investment will be a major win for Slovakia, where the government has been making efforts to boost its appeal to international investors. Earlier this year, the government fast tracked legislation on state aid to large investors, and on construction laws, the Slovak Spectator reported.
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