BRATISLAVA -- 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 finalized by Thursday," the source, who is close to the government, said.
The source said that Ford, the second-largest U.S. car maker, planned to invest between 300 million and 400 million euros 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 rumors 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 over the past few years, luring car makers 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.
French PSA Peugeot Citroen and South Korea's Kia Motors are both now building car assembly plants in Slovakia with a planned investment of 700 million euros and 1 billion euros, respectively.
Germany's Volkswagen already has an assembly plant near the capital Bratislava, producing 280,000 cars a year.
Peugeot plans to make 300,000 cars a year 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.