London - 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.
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 JLR’s commitment to deliver more lightweight vehicles, the plant would manufacture a range of aluminium Jaguar Land Rover vehicles. It is anticipated that the first cars will come off the production line in 2018.
JLR chief executive officer Ralf Speth 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.”
JLR studied a number of locations including Europe, the US and Mexico, but settled on Slovakia as 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.
Slovakian prime minister Robert Fico 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.”
Separately, the slowdown in China’s economy appears to have taken its toll on Jaguar Land Rover, which has seen lower sales across the country in recent months.
Tata, the India-based conglomerate that owns the luxury carmaker, said overall group revenue for the three months ended 30 June 2015 fell 6 percent to INR610bn (£6.17bn), while pre-tax profits were down 42 percent at INR43.6bn (£440m).
The group said JLR’s revenues for the quarter were down 6.6 percent at £5bn, while operating profits fell more than 16 percent to £821m, with pre-tax profits of £638m down 31 percent.
The dip in JLR’s fortunes was described by Tata as a result of “softer sales in China” which it said were partly offset by a better showing in the UK, Europe and North America.
“Land Rover maintained healthy sales in the quarter with Range Rover, Range Rover Sport Discovery and Defender all up compared to the corresponding quarter last year,” the group said.
Tata said the group’s Discovery Sport model was already outselling the Freelander which it replaced. However Evoque sales were lower due to the ramp up of localised production in China and softer market conditions in the country.
“Jaguar sales volumes were down as the sales of XF and XJ fell ahead of the new lightweight XF and the refreshed XJ 16MY, on sale in autumn this year, partially offset by the successful introduction of the new Jaguar XE,” it said.