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->ke39 Range Rover->ke469 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->ke94, PSA Peugeot Citroen ->ke68 and Kia ->ke41all build cars there, and between them built a total 973,370 cars in 2014.
Most of the VW Group's luxury SUVs->ke145 make at least one stop at the company’s Bratislava plant during production, including the Porsche Cayenne->ke212, Audi Q7->ke1083, Volkswagen Touareg->ke321 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’d ->ke1899compact family and 2016 Kia Sportage SUV.