Jaguar Land Rover (JLR) announced on Monday that it is moving its Discovery Land Rover production line from the UK to Slovakia.
A new factory in the city of Nitra, Slovakia, should be scaled up to produce 300,000 vehicles a year, adding 1,400 people to its workforce.
Over the course of 2017, JLR produced 530,000 cars in the UK, employing 10,000 people in manufacturing and 40,000 people throughout the group. The Indian-owned (Tata Group) company and maker of iconic British brands is estimated to produce one in three cars bought in the UK, which is Europe’s second-biggest auto market.
The company will close one of its three factories and reduce output in the two remaining, according to the Chief Finance Officer Ken Gregor.
Last year JLR saw its profits drop by £100 million (€114 million) due to slower growth and increased investment.
The cost-saving move is said to be a response to increased taxation and declining demand for Diesel and petrol technology cars. Overall sales surged by 1,7%, driven mainly sales in China, but the domestic market contract by just under 13%.
In justifying its move, the firm also makes an explicit link to Brexit, which it links to consumer confidence.
The company claims it is still committed to British manufacturing and promises to replace the production line in Solihull with a new line of hybrid and electric models by 2020.
The company has not made clear how much it will be investing in the Midlands region but the company’s move may well be strategic as it aims to prepare the company to reach non-European markets. A recurring question in manufacturing is not so much market access but the disruption of a pan-European value chain. The UK government has yet to make clear whether there is a strategy of “reshoring” manufacturing in view of Brexit.
In the meantime, Tata Motors is producing its first electric vehicles (I-PACE) in Austria.