JLRs volume growth means that it is nearing capacity limits at UK plants such as Solihull

JLR's volume growth means that it is nearing capacity limits at UK plants such as Solihull

Jaguar Land Rover (JLR) is reportedly in talks that could result in a new manufacturing plant in Eastern Europe.

News agency Bloomberg reported remarks made by Poland's Deputy Prime Minister Janusz Piechocinski in which he said the country is in talks over what would be "the biggest investment in the car manufacturing industry in Poland".

"Poland is still in the game as regards a certain Asian investor," Piechocinski told journalists. "Our remaining rival is Slovakia," he added.

It is being widely assumed that the remarks concern a potential investment by Tata-owned JLR.

Media reports suggest the plant would produce as many as 350,000 vehicles a year with production due to begin in 2019.

A JLR spokesperson told just-auto that the company is looking to raise production and is examining a range of opportunities around the world. "Europe is one of a number of options," she said. "But no decisions have been taken yet."

JLR is expanding its global manufacturing footprint with a JV factory in China and the construction of a new plant in Brazil. It has also announced a deal for some future assembly of its models by contract assembler Magna Steyr in Austria.

Analysts say that a plant in Eastern Europe would be primarily aimed at reducing JLR's cost base rather than about meeting local demand. JLR-owner Tata is said to be concerned about relatively high costs at its UK plants (which are running at near capacity). A plant in Poland or Slovakia may also benefit from local incentives and would also be inside the EU, crucial for potential exports to Western European markets. The eastern part of the EU has attracted a number of OEMs over the past decade and its supplier industry is also better developed now. 

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