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Old 12th December 2015, 10:29   #1
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Default Slovakia: JLR to set up a new 1 billion manufacturing facility

Jaguar Land Rover has announced that it will build a new plant in the city of Nitra, Slovakia.

This manufacturing facility will be set up with an investment of approximately 1 billion (Rs. 10,188 crore). This new investment is likely to create 2,800 jobs.

Regions in other European countries, United States and Mexico were considered before the company zeroed down on Slovakia for its next manufacturing facility. Slovakia's premium automotive sector represents 43% of the country's overall industry, and it has more than 300 suppliers in close proximity and offers an excellent logistics infrastructure.

This plant will manufacture a range of aluminium Jaguar Land Rover vehicles. The first batch of cars is likely to roll out in late 2018. The production capacity of this plant will be 1,50,000 vehicles initially; construction of the facility will begin in 2016.

Currently, JLR has facilities in UK, China, Brazil and India. The company has also invested heavily in its UK manufacturing facilities at Castle, Bromwich, Halewood and Solihull to support the introduction of new vehicles such as the XE, XF, F-Pace, Evoque Convertible and Discovery Sport.

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Old 13th December 2015, 11:31   #2
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Default Re: Slovakia: JLR to set up a new 1 billion manufacturing facility

I really wonder the intentions of Tata group. What were the top management of JLR smoking when they planned to setup a facility in Europe? Being an Indian company first thought of setting up a manufacturing facility for JLR should be India not Some country in Europe where there is zero growth. If the same facility was set up in India their Indian sales would have grown at least 10 times over next 5 years due to reduction in price of their cars and growth of higher middle class in India over next 5-10 years. In addition to this I am sure the overall production cost in India would be lower as compared to any country in Europe.
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Old 13th December 2015, 16:25   #3
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Default Re: Slovakia: JLR to set up a new 1 billion manufacturing facility

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Originally Posted by DieselFan View Post
I really wonder the intentions of Tata group. What were the top management of JLR smoking when they planned to setup a facility in Europe? In addition to this I am sure the overall production cost in India would be lower as compared to any country in Europe.
When a decision to invest does not make sense on the face of it always look for the word tax breaks to uncode the decision. Like you I cannot fathom this decision though for different reasons. I have extensive personal experience of having invested in Slovakia (also called Slovak Republic) and been driven nuts by their bureaucracy and poor labour culture and productivity. I wish JLR all the best.
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Old 13th December 2015, 17:38   #4
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Default Re: Slovakia: JLR to set up a new 1 billion manufacturing facility

This could also show how independent JLR is in its decision. Makes one wonder how much control do Tata really have on JLR.
Proximity to markets could also be one of the reasons in addition to perks offered.
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Old 14th December 2015, 11:51   #5
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Default Re: Slovakia: JLR to set up a new 1 billion manufacturing facility

Definitely a peculiar choice - this FT article offers more detail. Other than VW, Peugeot & Kia, there are no global biggies in Slovakia.

India wasn't even on the consideration list!

Quote:
JLR officials visited the preferred site, in Jawor, near Wroclaw, on multiple occasions. In Warsaw, some officials at the government’s PAIiIZ foreign investment agency were briefing journalists that it was as good as decided.

Such arrogance and lack of discretion went down very badly with JLR, according to many people who spoke to the Financial Times for this article.
Quote:
The Slovaks designated the 1,810 acre site in Nitra that it had offered to JLR as the country’s first strategic industrial park, allowing it to offer tax and other fiscal incentives to the British carmaker and suppliers that would set up shop alongside them, according to a person involved in the negotiations.

Then, in late July, Slovak Prime Minister Robert Fico decided he wanted to show just how serious the country’s government was about landing the deal. Visiting the Grand Hotel River Park on the banks of the Danube in Bratislava, where the visiting JLR executives were staying, he held a morning meeting with the team and left them his personal mobile phone number.
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Old 14th December 2015, 12:36   #6
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Quote:
Originally Posted by V.Narayan View Post
When a decision to invest does not make sense on the face of it always look for the word tax breaks to uncode the decision. Like you I cannot fathom this decision though for different reasons. I have extensive personal experience of having invested in Slovakia (also called Slovak Republic) and been driven nuts by their bureaucracy and poor labour culture and productivity. I wish JLR all the best.
I guess, being a big league company, attitudes are different. Even over here, the small entrepreneur facing proportionally more hurdles comapred to a big brand name setting up shop

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Originally Posted by DieselFan View Post
I really wonder the intentions of Tata group. What were the top management of JLR smoking when they planned to setup a facility in Europe? Being an Indian company first thought of setting up a manufacturing facility for JLR should be India not Some country in Europe where there is zero growth. If the same facility was set up in India their Indian sales would have grown at least 10 times over next 5 years due to reduction in price of their cars and growth of higher middle class in India over next 5-10 years. In addition to this I am sure the overall production cost in India would be lower as compared to any country in Europe.
They already have underutilised Tata factories that they can use. They wanted a low cost location to export to Europe, Middle East, Russia. Slovakia provides that base.

Last edited by ajmat : 14th December 2015 at 13:15.
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Old 14th December 2015, 19:35   #7
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Default Re: Slovakia: JLR to set up a new 1 billion manufacturing facility

The only things I know about Slovakia are Hostel, the movie and car manufacturing. Last time I checked, Slovakia was the largest producer of cars per capita and auto manufacturing accounts to a huge share of their industrial output and exports. VW, Peugeot & Kia all have huge plants here.

My guess is, location to export to Europe, Middle East, Russia was the reason for choosing it. Their plant in China will take care of the Chinese market and the UK plants will cater to UK and the American market. And, it always helps that the Slovak government has approved 130 million euros ($143 million) in state aid for the project.
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Old 15th December 2015, 10:37   #8
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Default Re: Slovakia: JLR to set up a new 1 billion manufacturing facility

In addition to that, Slovakia also has a good presence of suppliers ( close to 320 suppliers have base there) and skilled workforce.
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