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Jaguar Land Rover announced overnight that it intends to build a new factory in Nitra, a city in western Slovakia.

Overnight the Tata-owned luxury car maker signed letter of intent with the Slovakian government. The British automaker will now begin a feasibility study, which will conclude by the end of this year.

If given the go ahead, the company hopes to have the factory producing vehicles by the end of 2018. The company says that production at the plant could be ramped up to as high as 300,000 cars per annum within the next decade. Last year, the company sold 462,678 around the world, up around nine per cent on its 2013 sales total.

Other countries that were in the mix to host a new Jaguar Land Rover factory included the USA, Mexico and other nations within the EU. The company eventually decided on Slovakia, which it says has “a strong supply chain and good logistics infrastructure”.

Slovakia has been a part of the EU since 2004 and has been using the euro as its currency from the beginning of 2009. According to analysts who spoke to Fortune, the choice of the Eastern European nation may indicate that Jaguar Land Rover is planning to build smaller, lower-margin vehicles there.

For its part, the company is playing its cards close to its chest, saying simply that the new facility will “manufacture a range of aluminium Jaguar Land Rover vehicles”.

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In recent times the company has been looking to expand its overseas production facilities. Last year, the company opened a new factory in China with its joint venture partner Chery. Cars being produced there include the Range Rover Evoque and, soon, the Land Rover Discovery Sport.

At the end of 2014, Jaguar Land Rover broke ground on a new plant in Brazil that will eventually make the recently launched Land Rover Discovery Sport.

Cover image: EU/Slovakian flags by Flickr user Harald Groven




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