Speculation is mounting that Jaguar Land Rover is close to unveiling plans for a new Eastern European factory with either Poland or Slovakia being the likely location.
The move comes as the Midland car-maker continues its rapid growth amid plans to almost double production to 1.5 million vehicles a year.
The widely anticipated move follows sustained expansion at Land Rover’s traditional home in Lode Lane, Solihull, the opening of a factory in China as part of a joint venture with Chery Automotive and a partnership with Austrian firm Magna Steyr, which will see some Jaguar Land Rover vehicles built under contract.
Earlier this year the Post said the firm was looking at the possibility of production in Turkey and there has been continued speculation about a US production facility being set up.
Jaguar Land Rover’s chief executive Ralf Speth indicated a US plan was still under consideration but was still some way off, reinforcing speculation the firm is set to make its Eastern European move sooner rather than later.
It is now thought an announcement could be made in the autumn.
In his latest Birmingham Post column Professor David Bailey from Aston Business School said: “Earlier this year, JLR dropped some heavy hints that the firm was looking at investing in the region (Eastern and Central Europe) as well as the United States.
“Since then, JLR has been thought to be exploring sites in Poland, Hungary, the Czech Republic and Slovakia. That has now been narrowed down to Poland and Slovakia, it seems.”
Mr Bailey said although he did not name Jaguar Land Rover, Polish Deputy Prime Minister Janusz Piechocinski revealed an investment by a ‘premium auto firm’ could be worth as much as £1.2 billion and that a factory could produce up to 350,000 units a year and be up-and-running by the end of 2019.
If Poland were chosen, Mr Bailey said it was likely the new plant could be located in Jawor, around 40 miles west of Wroclaw.
According to the Polish newspaper Gazeta Wyborcza JLR representatives have visited the site several times, including a visit earlier this month.
However Mr Bailey said the Poles believe it is now a two-horse race with Slovakia, where the Slovak government recently approved the setting up of the country’s first strategic industrial park, 50 miles north east of the Slovak capital Bratislava. The 1,810 acre site at Nitra could offer space for an automotive plant and supplier park.
Mr Bailey said it could prove a close battle.
“Poland and Slovakia will slug it out offering whatever incentives they can under EU State Aid rules,” he said.
“Poland has an advantage in that industrial labour costs in Poland average under €8.5 an hour, against over €10 in Slovakia. That could help sway the decision the way of Poland.”
With the firm close to full capacity in the UK Mr Bailey said the Eastern European plan was the best means of delivering growth.
He said: “The plant being planned in Poland or Slovakia suggests to me that JLR has raised its output goal from around 1 million units a year to 1.5 million a year over the next decade. To put that in perspective, this year JLR output will top 500,000 units.
“The UK could stretch to 650,000 units a year at full swing. The plant in China is already producing and could run to 150,000 a year, notwithstanding the market headwinds that the firm will face in that market.
“The plants in India and Brazil could see 100,000 units a year between them. A North America plant is still on the agenda, with the US states of Georgia and South Carolina thought to be current frontrunners. That would likely see a capacity of 250,000. Contracting out assembly to Magna in Austria could add 50,000 a year.
“Add in the new plant in Eastern Europe with a capacity of 350,000, and I get to just over the 1.5 million a year mark. That is over three times the output JLR saw last year.”
A spokesman for Jaguar Land Rover said: “Jaguar Land Rover continues to evaluate opportunities around the world.
“Europe is just one of the places under consideration. No decisions have been taken.”