BRATISLAVA -- Slovakia is in preliminary talks with British car maker MG Rover over a new 200 million euro ($250.3 million) auto production plant in central Europe, a source close to the negotiations told Reuters on Tuesday.
The government is also negotiating with Japanese tyre maker Bridgestone over a 30 million-euro plant, said the source, who did not want to be named.
The source said Rover aimed to produce 100,000 cars a year in the factory, which local press reports had previously said would cost 400 million euros.
"It is 100,000 cars (a year)... and 200 million euros," he said. He declined to elaborate further.
MG Rover has tried to take over the ailing south Korean carmaker Daewoo-FSO and buy its Warsaw plant, which has a total capacity of up to 200,000 cars a year, but its attempts have so far been blocked by tough talks with Daewoo-FSO's creditors.
The source said Bridgestone, Japan's biggest tyre maker, was currently deciding where in central Europe to put a tyre cord production facility which would also supply Germany's Volkswagen, the backbone of Slovakia's booming car sector.
Volkswagen's plant outside Bratislava produces 280,000 cars a year, makes up around 20 percent of exports and is Slovakia's only fully functioning car plant. The rest of the country's car industry is made up mainly of auto parts plants.
Bridgestone's tyre facility could also possibly supply France's PSA Peugeot Citroen, whose 700 million-euro, 300,000 car per year plant will come online in western Slovakia in 2006.
The 30 million-euro Bridgestone investment is seen as the first phase of an extendable larger project. The source said the Czech Republic and Poland are also possible candidates. Bridgestone officials have declined to comment.
Slovakia and its neighboring ex-Soviet satellite states have lured billions of euros in foreign investments due to an attractive mix of cheap skilled workforce, proximity to western markets and forthcoming EU entry.
South Korea's Hyundai Motor is in the final stages of choosing between Slovakia and Poland -- it appears to favor the former -- to build a 1.1 billion euro, 300,000 cars a year factory, while Japan's Honda is also looking for a site to build a factory in the region.