Jaguar Land Rover is considering building a plant in Mexico, following other luxury car makers lured by cheap labor and free trade agreements.

Mexico is a “very strong option” for Jaguar Land Rover to invest in, possibly more than $500 million, said Joseph ChamaSrour, Jaguar director general for the brand in Mexico.

“Three years from now it could be interesting to have a plant in North America, and Mexico would definitely be a very strong candidate because of the cost of labor, the logistics and the expertise of the whole supply network,” he said in an interview in Mexico City.
Jaguar, owned by India’s Tata Motors Ltd., would tread a well-worn path to Mexico, Latin America’s top vehicle producer, which has already wooed Germany’s premier luxury brands. Last year, BMW AG committed $1 billion to start turning out 150,000 cars in 2019, following Volkswagen AG’s Audi and Daimler AG’s Mercedes-Benz in deciding since 2012 to build cars in Mexico.

Earlier this month Toyota Motor Corp., the world’s best-selling automaker, said it will spend about $1 billion to begin producing Corollas in 2019 in Mexico, its first car factory in the country as it ends a self-imposed freeze on new plants following the financial crisis. Hyundai Motor Co. may also build a factory in the country, its managing director in Mexico said earlier this month, joining a roster of other Asian manufacturers including Nissan Motor Co. and Honda Motor Co.

Automakers are flocking to Mexico to take advantage of a low-wage yet highly experienced labor base, and export access to the U.S. and other countries through the North American Free Trade Agreement.

Land Rover’s Range Rover Vogue and Range Rover Sport are top sellers in the U.S. and could possibly be produced at a new Mexico factory because it would be tied to the U.S. market, ChamaSrour said. He didn’t rule out producing Jaguars at the plant.