BRATISLAVA, Slovakia -- Slovakia is near a deal with Ford Motor Co. to build a car parts plant for up to 400 million euros, sources close to the deal told Reuters on Tuesday.
"There are still some issues to be negotiated, but we expect the deal to be finalised by Thursday," the source, who is close to the government, said.
The source said that Ford planned to invest between $300 million and $400 million in the greenfield plant, which would be located in eastern Slovakia.
Another source told Reuters that the plant would make engines, engine parts and gear boxes.
"We don't comment on rumours and speculation," a Ford of Europe spokeswoman said in Germany.
Officials at the economy ministry, which is in charge of negotiations with foreign investors, were not immediately available for comment.
Ondrej Zember, spokesman for the government's foreign investment agency SARIO said he could not comment on Ford investment plans.
"It would be premature to comment on this at present," Zember said.
Slovakia has become the engine for Europe's automotive industry in the past few years, luring carmakers with its proximity to European markets, cheap labor force and low tax rate.
The Ford plant would be the third major auto investment into the new EU member in the past two years.
PSA Peugeot Citroen and Kia Motors are both building car assembly plants in Slovakia with a planned investment of $700 million and $1 billion, respectively.
Volkswagen has an assembly plant near the capital Bratislava, producing 280,000 cars annually.
Peugeot plans to make 300,000 cars annually in its Slovak plant from 2006, while Kia expects to start with an annual output of 200,000 vehicles in late 2006 or early 2007.
Foreign direct investment deals are closely watched by the financial markets as inflows of funds from abroad and expectations of their positive impact on Slovakia's growing economy have been one of the main factors boosting the crown to record highs this year.
The crown did not show an immediate reaction to the Ford news, but dealers said they expected firming pressure on the currency to resume once the deal is announced.