Jaguar Land Rover is nearing a decision on the new Eastern Europe plant, says a report from The Financial Times. Expansion in homeland has been ruled out due to high wage costs and disputes with trade unions. The company was considering opening a plant in the U.S. but it didn’t seem to be a feasible location. So, it was reportedly eyeing Austria and Turkey for the new plant.
Citing unnamed sources, the new report indicates that the company has again changed its mind with respect to the plant location. Czech Republic, Hungary, Poland and Slovakia are now in the final list of consideration. JLR officials are analyzing which country is going to offer the best incentives. The company wants a location where the costs are much lower (than the UK) and there is no risk of conflicts from trade unions.
The report suggests that the new Eastern Europe plant is more about cheap labour for cost reduction than adding production capacity to match targeted sales growth. JLR isn’t the only one with this strategy though, it’s German rivals do the same.
[Source: The Financial Times]