Jaguar Land Rover, Britain's largest automaker, said on Thursday that it will build a new E-PACE compact sport utility vehicle (SUV) in China and Austria. This will also be the first car to be built in a foreign market outside the homeland.
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Jaguar Land Rover said its three UK plants are either fully operational or near-saturated, but the decision to transfer foreign production will raise concerns that the company is seeking to increase production through overseas operations rather than investing heavily in domestic capacity. .
The company, controlled by India's Tata Motors, is rapidly expanding its production levels and model production lines, and in 2015 decided to build a large factory in Slovakia instead of expanding its presence in the UK.
Like most of the UK's auto industry, Jaguar Land Rover is also worried that Brexit may face long customs delays and up to 10% tariffs on auto exports, which could jeopardize UK production capacity.
Jaguar Land Rover's Austrian contract carmaker Magna Steyr is a subsidiary of Magna International, and in China, Jaguar Land Rover plans to jointly produce with Chery. Two foreign plants will produce the E-PACE compact sport utility vehicle (SUV).
Jaguar Land Rover said in a statement: "As the plan is in place, Jaguar Land Rover's three automotive manufacturing plants in the UK are close to operational capacity, and the creation of overseas manufacturing facilities will provide more capacity to support the company's future strategy."
“Foreign production will help Jaguar Land Rover to offer customers more exciting new models to prevent exchange rate fluctuations and create a globally competitive business.â€
Magna will also begin production of the company's previously announced first electric vehicle, the I-PACE, in 2018, but Jaguar Land Rover said it hopes to build low-emission vehicles in the UK if certain conditions are met.