Jaguar Land Rover opens Slovakia factory as Brexit looms

A Jaguar XE car is presented at the Paris Auto Show on October 3, 2014 | © AFP pic

NITRA: Jaguar Land Rover on Thursday opened a 1.4 billion euro (US$1.6 billion) factory in Nitra, western Slovakia, its first in continental Europe as Brexit looms, company officials said.

“Slovakia was a natural choice for us,” Jaguar Land Rover CEO Ralf Speth told reporters at the opening, adding that JRL aims to initially produce 100,000 vehicles per year at the plant, which he identified as “one of the most advanced facilities in the world”.

Construction began two years ago as Britain voted to leave the European Union.

JRL Chief Operating Officer Alexander Wortberg said the facility, which is the first that the UK-based company has opened in continental Europe, was part of the company’s “long-term globalization plan”.

“For us, it is important that there is no hard Brexit, as it can cause our company huge problems,” Wortberg told journalists after the opening ceremony.

Slovak Prime Minister Peter Pellegrini added that Bratislava was “happy to have persuaded JRL to build this plant here, their largest investment so far outside of their home country.”

Slovakia is already home to three large car plants, including Germany’s Volkswagen, South Korea’s Kia Motors and France’s PSA Peugeot Citroen, along with more than 300 automotive supply companies.

Automakers generate over 300,000 jobs in Slovakia, an EU and eurozone member of 5.4 million people, making it the world’s largest per capita car producer.

According to analyst Michal Habrman from the Bratislava-based Financial Policy Institute (FPI), the “JLR investment will increase Slovakia’s GDP by 0.5% in 2020”.

The Slovak economy is set to expand by 4% this year, according to a National Bank of Slovakia estimate.

The carmaking sector has a 44% share of Slovakia’s total industrial production and 35% of its exports.

Last year, 1,001,520 cars rolled off assembly lines in Slovakia and exports were worth 3.7 billion euros (US$4.3 billion).

Plans call for the workforce at the new JRL plant to expand from the current 1,500 employees to 2,800 by 2020. It will generate another 22,000 indirect jobs at subcontractors and in services, according to estimates.

The luxury SUV Land Rover Discovery will be the first model to roll off the assembly line.

Slovakia provided 125 million euros in state aid, which the EU said was in line with regulations following a probe.

JRL plans to expand production to 300,000 vehicles per year, but has not yet specified when this may occur.