Jaguar Land Rover to open factory in Slovakia – comment

Ian Fletcher, principal analyst with IHS Automotive, offers the following comment on the news that Jaguar Land Rover (JLR) is to open a factory in Slovakia. Fletcher says: “After months of speculation JLR has tentatively chosen Slovakia as a base for production in Eastern Europe. This country has seen significant investment in the past decade or so and is a key location for VW Group, PSA and Hyundai-Kia vehicle manufacturing.

“During the last ten years, production has grown from 270,000 units in 2005 to 843,000 units in 2014. Amongst the reasons that JLR may have chosen this country include the existing expertise of car manufacturing that takes place in the country, with a particular density near Nitra. This will have brought with it some of the logistics and supply chain required. There is also the relative labour cost benefits compared to manufacturing in Western Europe, as well as renewed efforts by the Slovakian government to bring large investors in to the country.

“While there are no formal details as to the model(s) that might be built at the site, the statement suggests ‘a range of aluminium Jaguar Land Rover.’ With this in mind, it is likely to be vehicles produced using the same architecture that underpins the new Jaguar XE sedan. This includes new crossovers for both Jaguar and Land Rover brands that are expected over the next to be launched over the next few years. 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.”