Jaguar Land Rover production at full tilt

Jaguar's global sales success has created a headache of sorts for the Tata-owned luxury marque.

Production output (for Land Rover too) is effectively at capacity, prompting Jaguar Land Rover (JLR) to hand manufacture of its E-PACE and I-PACE SUVs over to Magna-Steyr's Graz, Austria facility.

Magna-Steyr, the company that was in the bidding for Opel years before PSA acquired the GM subsidiary, builds right-hand drive Chrysler-Jeep products sold in Australia on behalf of the pentastar brand. So the Austrian company is a known name in the automotive industry and enjoys a good reputation.

JLR has made it no secret that the two Jaguar SUVs would be built in Austria. During the launch of the E-PACE this week, motoring spoke with the vehicle's line director, Alan Volkaerts, concerning the manufacturing contract.

When asked, Volkaerts confirmed that JLR plants are at production capacity and there's no immediate option to expand that capacity further for E-PACE and I-PACE.

"Yeah, exactly right."

"It's fairly common practice in the industry to use contract manufacturers to supplement existing capacity. Our Solihull [UK] plant, for example, builds over 300,000 cars a year. So in some cases it makes more sense to go and contract it out.

"It's a very busy place," Volkaerts says of Solihull.

Volkaerts says that Solihull is building Range Rover, Range Rover Sport, Discovery, F-PACE and Velar – all aluminium-bodied vehicles. Steel-bodied Jaguars (and the XJ limo) are built at Castle Bromwich and JLR's Halewood plant manufactures the Discovery Sport and Range Rover Evoque. International sites in India, China and Brazil are also producing JLR vehicles, with the Chery Jaguar Land Rover joint venture in China set to add E-PACE to its existing repertoire of Evoque, Discovery Sport, XE and XF.

"The contract with Magna-Steyr is a relatively routine thing in the industry now, and we did it to effectively supplement our UK plants, all three of which are at capacity."

Nonetheless, it is a big step for JLR, although Volkaerts says the company is confident the contract with Magna-Steyr will yield a good outcome for both parties.