JLR has not confirmed what models will be produced at the new plant but has said it will boost its total production by an extra 300,000 vehicles over the next decade.

The carmaker, owned by the Indian Tata Group, has signed a letter of intent with the Slovak government for the potential development of a new manufacturing plant in the city of Nitra in western Slovakia, the company wrote in its press release.

The move marks the next step in Jaguar Land Rover’s strategy to become more competitive globally, and challenge the likes of BMW, Audi and Mercedes in markets around the world.

“With its established premium automotive industry, Slovakia is an attractive potential development opportunity for us”, Chief Executive Ralf Speth said.

The UK is the cornerstone of Jaguar Land Rover’s business.

Jaguar Land Rover has made significant progress in building its worldwide manufacturing presence over the past year.

JLR’s decision to open production in Slovakia makes sense as Slovakia is already a major auto producer, boasting production of one million cars a year thanks to VW’s plant in Bratislava, Peugeot Citroen’s production in Trnava and Kia’s in Zilini, and a strong supply chain and logistics infrastructure too.

The Slovak government is delighted to be selected as Jaguar Land Rover’s preferred location for this feasibility study. The new plant will complement the company’s existing facilities in the United Kingdom, China, India and the one under construction in Brazil, he added.

JLR now employs more than 36,000 people in the UK across its factories in the Midlands and north-west England. The plant will eventually have the capacity to produce 300,000 vehicles. The factory would also manufacture a range of aluminum JLR vehicles, with the first cars rolling off the line in 2018.

The news comes just days after JLR announced that its first-quarter profits had fallen by nearly a third as demand for its cars fell in China.

“We look forward to working closely with Jaguar Land Rover over the coming months to progress the negotiations”.

Poland’s Deputy Prime Minister Janusz Piechocinski said Slovakia had offered high state subsidies which it would not match. “We need to know that jobs in the UK are secure”.

“Slovakia was ready to pay much more than we could secure in our budget”, he said.

“We want to secure the medium- and long-term future of all the UK sites and workforce”.