Jaguar Land Rover evaluating Slovakia plant

The carmaker, owned by the Indian Tata Group, has signed a letter of intent with the Slovak government for the potential development of a new manufacturing plant in the city of Nitra in western Slovakia, the company wrote in its press release.

Ralf Speth, JLR chief executive, said on Tuesday: “The expansion of our business globally is essential to support its long-term, resilient growth”.

Professor David Bailey, an auto industry expert at Aston University, said that the decision to pick Slovakia could be a hedge against “Brexit” – the UK leaving the EU – and fluctuations in exchange rates in the single currency.

However, JLR said today that the UK is the cornerstone of Jaguar Land Rover’s business and remains at the centre of its design, engineering and manufacturing capabilities. The central European country has been chosen over other locations in Europe, the United States and Mexico due to the fact that it’s close to a strong supply chain and good logistics infrastructure.

The southern U.S. has seen its share of automotive wins over the past year, including announcements by Daimler AG that it would move its Mercedes-Benz U.S. headquarters from New Jersey to Georgia and build a Sprinter van production plant in South Carolina. “These types of vehicles further lift JLR’s wider global sales, with IHS Automotive anticipating its sales will grow from an already impressive 454,000 units during 2014 to around 828,500 units by the end of 2020”. “This includes new crossovers for both Jaguar and Land Rover brands that are expected to be launched over the next few years”.

JLR will invest about GBP 1 billion in the new plant, which will have a capacity of 300,000 cars per year, the FT reports.

Auto Express understands that the next-generation aluminium Land Rover Defender is likely to be the first vehicle built there, with future Jaguar Land Rover models pencilled in for the new factory at a later date.

“We are committed to developing Slovakia’s premium automotive industry and, should we be successful, this investment would represent a significant step forward in achieving this”, said Fico as cited in the carmaker’s press release.

The news comes just days after JLR announced that its first-quarter profits had fallen by nearly a third as demand for its cars fell in China.

“That is a great concern to us”.

He added: “We know the industry is cyclical and we are looking at an agreement where UK capacity is maximised, instead of some of these facilities they are building around the world”.