Cheerleaders for British manufacturing don’t have all that much to be cheerful about these days. The ‘workshop of the world’ days are long behind us, and the sector is flirting with recession yet again. News that UK car maker Jaguar Land Rover is investing £1bn in a new factory should therefore be welcome.
Except that the investment isn’t actually taking place in the UK. JLR announced today that it was building the facility near the city of Nitra in Slovakia. Once completed in 2018, the plant will employ up to 2,800 people and be able to produce 150,000 cars a year, about a third of the firm’s current output.
While it would have been nice if it had happened in the Midlands instead, it was a rational decision to pick Slovakia. Above and beyond any incentives that may have been offered by the government there, it’s cheap and has access to automotive expertise, suppliers and support services (the sector represents 43% of the nation’s industry). Just as importantly, it’s within the Eurozone, which allows JLR to hedge somewhat against deadly currency headwinds.
‘The new factory will complement our existing facilities in the UK, China, India and Brazil and marks the next step in the company’s strategy to become a truly global business,’ said chief executive Ralph Speth.
The fact is, even if it is owned by an Indian company (Tata) and is increasingly building its cars abroad (a Chinese plant is on the cards too), Jaguar Land Rover is still in a sense a British firm - and a British success story. The design, engineering and marketing of a company that has doubled its sales volumes over the last five years all take place here. All things considered it’s surely better this way than the other way around.