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JLR to set up $1.5 billion car plant in Slovakia

Jaguar Land Rover (JLR), the British luxury carmaker owned by Tata Motors, will set up a plant in Slovakia, beginning a $1.5 billion project which will be one of the biggest foreign direct investments in the central European nation, agencies reported.

JLR, which is rapidly expanding its model line-up and volumes, had said in August that it aimed to build a plant in the western Slovak town of Nitra with an annual output of up to 300,000 cars.
On Friday, the company said it would begin constructing the plant next spring with around 2,800 jobs created as production ramps up.

"The new factory will complement our existing facilities in the UK, China, India and Brazil and marks the next step in our strategy to become a truly global business," JLR CEO Ralf Speth said after signing the deal with the Slovak government in Bratislava.

JLR's new plant will operate alongside its British plants at Castle Bromwich and Solihull in the English midlands, and Halewood in the northwest, turning out models such as the Jaguar XE sports saloon and the Range Rover Evoque.

The Slovak government approved 130 million euros in state aid for the project, which helps Prime Minister Robert Fico project an image of strong economic management ahead of elections in March.
The car industry represents 43 per cent of Slovakia's industrial output and a quarter of its exports. Volkswagen, Kia and Peugeot Citroen already build hundreds of thousands of cars in Slovakia, and the Automotive Industry Association expects the country of 5.4 million to make almost 1 million cars this year.

Economy Minister Vazil Hudak said the JLR factory would create 12,000 jobs in supplier industries in addition to those at the factory. The Slovakian central bank expects it to add 0.3 percentage points to economic growth next year and 0.8 per cent once production begins.

Hudak said JLR would invest 1.4 billion euros through 2021, when capacity is expected to reach 150,000 cars. A further investment of 500 million euros would raise capacity to 300,000.
JLR has grown rapidly since it was bought by the Tatas in 2008 but has suffered in recent months due to a blast at China's Tianjin port, which destroyed thousands of its cars, and a sharp decline in sales in China earlier in the year. Speth said targets were unchanged by the setbacks. "China is still the biggest automotive market in the world, we can grow even more there," he said.