Jaguar Land Rover (JLR), Britain's largest car maker has announced that it will produce the new E-Pace compact SUV in Austria and China, which is the first time ever the brand will manufacture a car entirely outside its home market. The reason cited for this decision by JLR is that the plants in Britain were either full or were nearing their full production capacity. However, this announcement triggered speculations that the brand was looking to boost its output by using overseas operations, rather than invest in greater capacity at home. JLR is owned by Tata Motors and is rapidly expanding its production capacity and product line up. In 2015, the brand decided to build a major manufacturing plant in Slovakia instead of expanding operations in Britain.
JLR, like most British companies, is concerned that the UK's exit from the European Union could affect its car exports causing lengthy delays and tariffs up to 10%, which in turn would risk the viability of production in Britain.
Austrian contract carmaker Magna Steyr, a unit of Magna International, and JLR’s plant in China, which is a joint partnership with Chinese automaker Chery, will produce the E-PACE.
“With plans already in place to take Jaguar Land Rover’s three vehicle manufacturing plants in the UK close to their operating capacity, the creation of overseas manufacturing facilities delivers additional volumes needed to support the company’s future strategy,” Reuters quoted the firm.
“It allows Jaguar Land Rover to offer its customers even more exciting new vehicles, to protect against currency fluctuations and to build a globally competitive business,” the statement added.
Magna will also produce the firm’s previously announced first electric model, the I-PACE, from 2018, although JLR has said it wants to build low-emissions vehicles in Britain if certain conditions are met.