BRATISLAVA (Bloomberg) -- Jaguar Land Rover reached an agreement with Slovakia on the construction of a new factory with a production capacity of 300,000 cars a year, the country's government said.
The parties will sign an investment accord in the Slovak capital Bratislava on Friday, the cabinet's press department without elaborating on details of the project, including the size of the investment or the amount of state aid offered to the carmaker.
Slovak Economy Minister Vazil Hudak has previously said the state will offer maximum aid available under the European Union rules to attract one of largest foreign investment deals, which will boost the country's economic output.
The factory will be located in Nitra, western Slovakia, and is expected to roll out its first cars in 2018.
JLR signed a letter of intent in August to build the plant in Slovakia. The company picked the country over locations in Poland, the U.S and Mexico because of its strong supply chain and good infrastructure.
Volkswagen Group builds models including the VW Touareg and Audi Q7 at its Bratislava plant, Kia produced more than 300,000 vehicles in Zilina last year while PSA/Peugeot-Citroen's facility in Trnava made more than 255,000 vehicles last year. The VW and PSA plants are less than 100km from Nitra while Zilina is less than 200km away.
JLR, which Ford Motor sold to India's Tata Motors in 2008 for $2.3 billion, is expanding out of its UK home base. After opening a factory in China last year, JLR will start output at a Brazilian plant next year.
The Jaguar brand is aggressively challenging German premium rivals with the help of executives possessing nearly a century of experience at BMW.