Running out of production capacity is a good problem to have when you’re a car company. It usually means people are buying cars faster than you can build them. It’s a problem Jaguar Range Rover is facing right now, so the company has signed a letter of intent with the country of Slovakia to start a feasibility study for new plant in the western city of Nitra.

If built, the factory will join facilities in the U.K., China and one currently under construction in Brazil. JLR also recently entered an agreement with manufacturing and engineering giant Magna Steryr to outsource production of a yet-to-be-determined model at its facility in Austria.

The Slovakian factory will have a capacity of about 300,000 cars over 10 years and will be tooled with equipment for aluminum construction, helping JLR deliver on its promise for lighter, more fuel-efficient cars. If it gets the green light, the new factory could start turning out cars as early as 2018.

"With its established premium automotive industry, Slovakia is an attractive potential development opportunity for us,” said JLR CEO Ralph Speth.
But, Speth also assured that JLR’s global expansion would not come at the expense of jobs back home in England. "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 U.K."

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Why it matters

Jaguar Land Rover also looked at locations in the U.S., Mexico and other locations in Europe for the new factory before settling on Slovakia, citing the country’s location in relation to supply chains and logistics infrastructure.

Slovakia has quietly emerged as a car-manufacturing powerhouse in recent years. The small country of about 5.4 million people now builds more cars per capita than any other country in the world. According to a report appearing in The Slovak Spectator, Slovakia produces 183 cars per 1,000 citizens. Volkswagen, PSA Peugeot Citroen and Kiaall build cars there, and between them built a total 973,370 cars in 2014.

Most of the VW Group’s luxury SUVs make at least one stop at the company’s Bratislava plant during production, including the Porsche Cayenne, Audi Q7, Volkswagen Touareg and soon, the new 2016 Bentley Bentayga. PSA, meanwhile, is on track to build about 275,000 Citroen C3 Picasso minivans and Peugeot 208 hatchbacks in Slovakia, with a yet-to-be-announced third model to be added soon. The country is also home to Kia’s first, and currently only, factory in Europe, which has a capacity of 300,000 cars per year and is the European home of the Cee’dcompact family and 2016 Kia Sportage SUV.

Press Release

Jaguar Land Rover has signed a letter of intent with the Government of the Slovak Republic for the potential development of a new manufacturing plant in the city of Nitra in western Slovakia. With its established premium automotive industry, Slovakia is an attractive possible development opportunity.

The move marks the next step in the company’s strategy to become a more competitive global business by expanding its manufacturing operations into new international locations in the future.

The UK is the cornerstone of Jaguar Land Rover’s business. It remains at the center of Jaguar Land Rover’s design, engineering and manufacturing capabilities. Over the past five years, Jaguar Land Rover has employed more than 20,000 people taking its workforce to more than 36,000 and invested more than £11 billion in new product creation and capital expenditure.

During this time, the company has invested heavily in its UK vehicle manufacturing facilities at Castle Bromwich, Halewood and Solihull to support the introduction of all-new vehicles such as the Jaguar XE, Jaguar F-PACE, Range Rover Evoque and Land Rover Discovery Sport. Jaguar Land Rover has also invested more than £500 million in a new Engine Manufacturing Centre in the UK, creating 1,400 new jobs in the Midlands. In addition, it plans to expand its advanced engineering and design center at Whitley, Coventry and invest in the National Automotive Innovation Centre at Warwick University. Jaguar Land Rover’s sustained investment supports the delivery of the UK’s wider industrial strategy.

Dr Ralf Speth, Chief Executive Officer, Jaguar Land Rover, said, "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."

"With its established premium automotive industry, Slovakia is an attractive potential development opportunity for us. The new factory will complement our existing facilities in the UK, China, India and the one under construction in Brazil."

The feasibility study underway with the Slovakian Government will explore plans for a factory with an installed capacity of up to 300,000 vehicles over the next decade. As part of Jaguar Land Rover’s commitment to deliver more lightweight vehicles, the plant would manufacture a range of aluminum Jaguar Land Rover vehicles. It is anticipated that the first cars will come off the production line in 2018.

Following robust analysis of a number of locations including Europe, the United States and Mexico, Jaguar Land Rover has selected Slovakia as its preferred location. It is close to a strong supply chain and good logistics infrastructure. Subject to the outcome of the feasibility study, a final decision is expected later this year.

Robert Fico, Prime Minister of Slovakia said,"The Slovakian Government is delighted to be selected as Jaguar Land Rover’s preferred location for this feasibility study."

"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. It would provide a boost to our country’s wider industrial strategy as well as benefitting the European Union as a whole. We look forward to working closely with Jaguar Land Rover over the coming months to progress the negotiations."

Jaguar Land Rover has made significant progress in building its international manufacturing presence over the last year. It opened a new joint venture in China and commenced construction of its local manufacturing plant in Brazil at the end of 2014. The creation of new international plants allows Jaguar Land Rover to increase its presence in regions that have been identified as having growth potential, protect against currency fluctuations and achieve a more efficient, globally competitive business.

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