The planned opening of a fourth large car plant in Slovakia, by Jaguar Land Rover (now a subsidiary of Tata Motors of India), in late 2018 should boost production in the Eastern European country by at least 10 percent, a report by The Economist Intelligence Unit said.
Jaguar Land Rover originally announced the plan to open a Slovakian factory back in 2015, but just recently decided on a firm date – October 2018 – for the start of operations.
Slovakia is quickly becoming a hotspot for automakers in Europe, having produced a total of 1.04 million cars from three factories in 2016, a slight increase from 1.038 million in 2015, a statement from the country’s automotive union ZAP said.
Slovakia’s largest carmaker, Volkswagen, made about 385,450 cars at its plant in the capital Bratislava in 2016, three percent lower than 2015’s output, although the figures are only an estimate from ZAP, as VW will not report its official results until later this month.
Kia Motors’ plant in Zilina, 200 kilometers north of Bratislava, increased its output by 0.4 percent to 339,500 cars in 2016. Meanwhile, the third plant, of French carmaker PSA Peugeot Citroën in Trnava, 50 kilometers north of Bratislava, saw its output grow by four percent to 315,050 vehicles.
Largest car producer per capita
On a per capita basis, Slovakia has been the world’s largest car producer for several years; last year, Slovakian factories turned out 191 cars for every 1,000 citizens (the country has a population of about 5.43 million), compared with an European Union average of 41, and 128 per 1,000 citizens in the neighboring Czech Republic.
While Slovakia should gain rapidly with the opening of the Jaguar Land Rover works, the Czech Republic is a strong competitor, and actually saw production increase at a much faster pace in 2016, an 8.3-percent increase year-on-year to 1.3 million vehicles.
Slovakia’s three existing auto plants have again set a target of more than one million units for this year; PSA has set a production target of 350,000, banking on strong demand for the new Citroën C3 model built at Trnava. Kia Motors expects to keep its output at about 335,000 cars, despite struggling slightly with weak demand in one of its main markets, Russia, and the uncertain outlook for another large market for the company, the UK, following that country’s vote in June 2016 to leave the EU. Volkswagen aims to resume output growth this year, and will start final assembly of the Porsche Cayenne model (currently, it only makes the body). It is therefore highly likely that the three plants will again increase their output, probably at a slightly faster pace than in 2016, owing to the production increase at PSA.
Jaguar Land Rover is planning to open its plant in Nitra in October 2018. It currently plans to produce 150,000 vehicles in 2019, with capacity to build 300,000 cars every year.
The Economist noted that the new factory should support the further growth of the already expansive network of automotive suppliers in Slovakia. Whereas most existing infrastructure should be able to cope well with the increased production and exports, the analysts said, the opening of the new plant would exacerbate existing skills shortages and provide more upward pressure on wages.