Automotive News - Guide to Economic Development - Supplement - GED6

Slovakia shows how to
win a greenfield
To bring JLR's big new plant to Nitra, Slovakia
resolved a long list of issues

L

anding a new greenfield auto
assembly plant project is a rare
prize these days in Europe's mature auto
manufacturing landscape.
That makes Slovakia's recent success all
the more notable.
The sparsely populated eastern
European country last year recruited
luxury maker Jaguar Land Rover's 1.4
billion euro ($1.6 billion) project. Now
under construction in the Nitra region
of Slovakia, 60 miles east of the capital
Bratislava, the plant will start producing
the Land Rover Discovery crossover in
late 2018, with a capacity of 150,000
vehicles a year once three shifts of
workers are in place.
How Slovakia won the project is a case
study in addressing multiple concerns of
a prospective investor. For JLR, Slovakia
provided more than a field of ground - it
addressed worker training issues, social
services, supply chain provisions and
even political liabilities.
"It took five months of very intense

6

E C O N O M I C D E V E L O P M E N T G U I D E / J U LY 2 0 1 7

work to win the project, involving
dozens and dozens of consultants
meeting into the wee hours," recounts
Robert Simoncic, CEO of Slovakia's
investment and trade agency SARIO.
In the end, JLR was able to move
quickly to create both an auto plant
and a supplier park, with employee
questions resolved for both.

WORLD COMPETITION
Slovakia's negotiations with JLR began
in January 2015 as the automaker
scoured the world for a location. The
challenge for Slovakia - and for all other
interested suitors - was that JLR did not
need a particular location to support a
local market entry, explains Alexander
Wortberg, JLR's operations director
for the Nitra plant. Such auto plant
site searches are more common, as an
automaker uses a new factory to gain a
local competitive advantage - a strategy
that has been behind many North
American plants in recent years.

JLR

Slovak officials are
encouraging more citizens to
move to Nitra, where JLR is
constructing its plant.

For JLR, the site search was simple,
Wortberg says: The company needed
more production capacity.
JLR's three plants in the U.K. were out
of room, thanks to strong global sales of
its Land Rover/Range Rover crossovers
and Jaguar sporty saloons, Wortberg says.
That meant JLR was free to go where it
wanted, and Slovakia would compete
with other European countries, such as
Poland and Hungary, as well as potential
sites in the United States and Mexico.
The expansion of auto production
into eastern Europe has been one of
the defining trends for the European
industry in the past 20 years.
Automakers and suppliers were first
attracted by lower costs and more
flexible workforces. And although wages
are now rising in countries such as the
Czech Republic, Hungary and Slovakia,
they still remain lower than in many
Western European locations - even
a third less expensive than JLR's UK
home market, according to Ian Fletcher,
principal analyst for IHS Markit.
Over the past two decades, following
its 1993 separation from neighboring
Czech Republic, Slovakia has become
a formidable auto producer. Last year
the country made just under 1 million
cars at three assembly plants, making
it the sixth biggest vehicle producer in
the European Union. Most prestigious
of these plants is VW Group's Bratislava
facility, which makes the Audi Q7
and VW Touareg large SUV, as well
as the body-in-white for the Bentley
Bentayga SUV. Kia has a large plant in
Zilina to the east where it makes the
compact Sportage crossover, and PSA
Group turns out subcompacts at its
large Trnava plant, halfway between
Bratislava and JLR's Nitra site.

MONEY
Slovakia had another attraction as well:
money. The country offered incentives
of 125 million euros, the maximum
allowable under EU rules. Those stakes



Table of Contents for the Digital Edition of Automotive News - Guide to Economic Development - Supplement

Automotive News - Guide to Economic Development - Supplement - Intro
Automotive News - Guide to Economic Development - Supplement - GED1
Automotive News - Guide to Economic Development - Supplement - GED2
Automotive News - Guide to Economic Development - Supplement - GED3
Automotive News - Guide to Economic Development - Supplement - GED4
Automotive News - Guide to Economic Development - Supplement - GED5
Automotive News - Guide to Economic Development - Supplement - GED6
Automotive News - Guide to Economic Development - Supplement - GED7
Automotive News - Guide to Economic Development - Supplement - GED8
Automotive News - Guide to Economic Development - Supplement - GED9
Automotive News - Guide to Economic Development - Supplement - GED10
Automotive News - Guide to Economic Development - Supplement - GED11
Automotive News - Guide to Economic Development - Supplement - GED12
Automotive News - Guide to Economic Development - Supplement - GED13
Automotive News - Guide to Economic Development - Supplement - GED14
Automotive News - Guide to Economic Development - Supplement - GED15
Automotive News - Guide to Economic Development - Supplement - GED16
Automotive News - Guide to Economic Development - Supplement - GED17
Automotive News - Guide to Economic Development - Supplement - GED18
Automotive News - Guide to Economic Development - Supplement - GED19
Automotive News - Guide to Economic Development - Supplement - GED20
Automotive News - Guide to Economic Development - Supplement - GED21
Automotive News - Guide to Economic Development - Supplement - GED22
Automotive News - Guide to Economic Development - Supplement - GED23
Automotive News - Guide to Economic Development - Supplement - GED24
Automotive News - Guide to Economic Development - Supplement - GED25
Automotive News - Guide to Economic Development - Supplement - GED26
Automotive News - Guide to Economic Development - Supplement - GED27
Automotive News - Guide to Economic Development - Supplement - GED28
Automotive News - Guide to Economic Development - Supplement - GED29
Automotive News - Guide to Economic Development - Supplement - GED30
Automotive News - Guide to Economic Development - Supplement - GED31
Automotive News - Guide to Economic Development - Supplement - GED32
Automotive News - Guide to Economic Development - Supplement - GED33
Automotive News - Guide to Economic Development - Supplement - GED34
Automotive News - Guide to Economic Development - Supplement - GED35
Automotive News - Guide to Economic Development - Supplement - GED36
Automotive News - Guide to Economic Development - Supplement - GED37
Automotive News - Guide to Economic Development - Supplement - GED38
Automotive News - Guide to Economic Development - Supplement - GED39
Automotive News - Guide to Economic Development - Supplement - GED40
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