bne IntelliNews -

Slovakia has won the regional race to attract a huge investment from Jaguar Land Rover (JLR). The Indian-owned carmaker announced on August 11 that it has signed a letter of intent with Bratislava to build the marque's first European factory outside the UK in the western city of Nitra.

The Slovak plant would manufacture a range of JLR vehicles, with the first vehicles being expected to come off the production line in 2018. A feasibility study will explore plans for a factory with capacity of up to 300,000 vehicles over the next decade, the carmaker said in a statement. A final decision is expected later this year when the study is completed.

Slovakia has competed for the investment - estimated by British media to be worth around GDP1bn (€1.4bn) - with its Visegrad peers for months. All of the countries host thriving auto sectors that are central to their economies.  In the past months, Poland, Hungary, the Czech Republic and Slovakia have all been heralded as the front runners. 

JLR said Slovakia was chosen thanks to a strong supply chain and good logistics infrastructure. The carmaker added that it has made a robust analysis of a number of locations including Europe, the United States and Mexico as it searched for an additional facility to relieve the pressure on its UK plants, which are reportedly running close to capacity. At the beginning of July, it announced a deal to manufacture some models via a partnership with Austria’s Magna Steyr. 

"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 CEO Ralf Speth said.

"Jaguar’s decision confirms Slovakia’s attractiveness among investors - thanks to the euro and strong automotive industry," Finance Minister Peter Kazimir tweeted. 

Playing the field

However, it remains to be seen what incentive Slovakia pledged to secure the auto builder. JLR looks to have been playing the field across Visegrad to see what offers it could attract. Although it made no official statement confirming plans to open a new plant in Central Europe in recent months, leaked information appeared almost weekly in the media.

That saw competing states hurrying to tempt the Indian investor. Slovakia amended its legislation on state aid for big investors in recent weeks. The revision makes it possible to speed up processes such as construction permitting. According to Slovak media, JLR’s investment is set to create 8,000 new jobs.

“The Slovakian Government is delighted to be selected as JLR’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,” Prime Minister Robert Fico said.

Poland reportedly offered "huge" incentives to Tata Motors to attract the planned factory, according to the UK press and officials in Warsaw. At the end of July, Polish Deputy Prime Minister Janusz Piechocinsk "confirmed" that Warsaw is in talks with a big, foreign automotive company. Poland would win an investment worth GBP1.7bn if the deal were finalised, he claimed, refusing to give any names. The investment would create more than 5,000 jobs, he added.