Bratislava eyes economic boost as JLR seals deal on Slovak plant

Bratislava eyes economic boost as JLR seals deal on Slovak plant
By Carmen Simion December 11, 2015

Indian-owned carmaker Jaguar Land Rover confirmed on December 11 it will build the marque's first European factory outside the UK in the western Slovak city of Nitra as it signed an investment agreement with the government in Bratislava.

JLR will invest GDP1bn (€1.4bn) in the facility, which will employ around 2,800. The plant will manufacture a range of all-new aluminium Jaguar Land Rover vehicles and will have an initial capacity of 150,000 units. Construction on the plant will start in 2016, with the first cars expected to come off the production line in late 2018.

The investment in Slovakia’s vital auto sector will help the country accelerate economic growth in the following years. Finance Minister Peter Kazimir told bne IntelliNews recently that JLR’s new plant could boost the country’s economic growth to 4% next year, while most growth projections are currently around 3%. Moreover, it will create the much needed jobs in the country, which has long struggled with high unemployment.

“Slovakia has an established premium automotive sector, which represents 43% of the country’s overall industry. It has more than 300 suppliers in close proximity and an excellent logistics infrastructure; this confirmed our decision that this country was the ideal location,” JLR CEO Dr Ralf Speth said in a statement.

Slovakia competed for the investment with its Visegrad peers for months. The Czech Republic, Hungary and Poland all also host thriving auto sectors that are central to their economies. All had claimed at various points throughout the year that they were close to striking the deal.

However, JLR announced in August it had signed a letter of intent with Bratislava. Slovakia amended legislation on state aid for large investors, making it possible to speed up processes such as construction permitting, as part of its successful bid to win the project. According to Pravda, Bratislava will hand the carmaker investment incentives worth around €130mn, or 9% of the total value of the project.

“We are glad that Jaguar Land Rover has chosen Slovakia for its new world-class manufacturing facility. This decision shows that, with a stable and solid business environment, Slovakia is an attractive place for investors. And the marriage of Slovak craftsmanship and British engineering holds great promise,” Slovak Prime Minister Robert Fico said.

Slovakia is already home to three major car assembly plants run by Germany's Volkswagen, South Korea's Kia Motors and France's PSA Peugeot Citroen.