There have been reports that JLR is considering a factory in Mexico. Although there's no confirmation, Mexico’s low wages and the North American free trade deal make it an ideal country from which to export to the US. Indeed, it has just been announced that Ford is moving production of the Focus and C-Max from North America to Mexico.
But none of JLR’s overseas production facilities will be as big as the one currently being finalised for a site that's tipped to be somewhere in eastern Europe.
Tipped to be a £950 million investment and have a capacity of up to 350,000 units annually, the new factory will be in either Poland or Slovakia, according to local media reports.
No car maker, especially when it is building lower-value vehicles, can ignore wages that could be as low as £6.25 per hour in Poland and £7.50 in Slovakia, compared with as much as £18 per hour in the UK.
Although neither country has publicly announced that it is in talks with JLR, Polish deputy prime minister Janusz Piechocinski said at the end of June that the country had reached the sixth round of negotiations with a premium car manufacturer for the construction of a new plant.
Local reports in the Polish press say that up to 6000 people could be employed at the new site. The timetable to get the plant running is tight, according to local reports, with construction getting under way later this year for a production start in 2019.
Not to be left out, Slovakia’s government has just revealed that it has changed the laws relating to the Act on Investments of Significance in order to win "the investment of the decade".
Economy minister Vazil Hudack was quoted as saying in 2014 that Slovakia had been missing out on big inward investments because it lacked the big industrial parks that companies wanted.
Hudack also said the decision on the new plant was expected to be made in mid-September.
Like many developing European countries that want to attract inward investment, Poland already operates Special Economic Zones. These benefit from the government offering state aid to inward investors as well as tax exemptions for the new business once they have been established.
Poland also seems to have the space needed for this big JLR plant. Polish reports say JLR is looking for 300-500 hectares, and the two front-running sites are at Środa Śląska and an airport at nearby Legnica.
Both are close to the big city of Wroclaw, although the airport site could be a little too small.
More importantly, a number of established car-making centres are within reasonable distance of this part of western Poland, including the Polish city of Gliwice (which has both a Toyota and an Opel plant).
These two potential sites are also not so far from Skoda’s Mlada Boleslav HQ and VW’s plant in Dresden. All of which is good news for JLR being able to access well-established component suppliers.
The announcement of such a big plant in eastern Europe will undoubtedly rattle nerves in the UK. But it’s becoming increasingly difficult to profit from car making in higher-wage economies, unless you are dealing with proper premium products.