Jaguar Land Rover is cutting production at its UK plants through the spring, a sign of its continued struggle to source semiconductors amid global shortages.
The automaker, whose chief executive, Thierry Bollory, announced his resignation last week, has decided to cut production at plants in Solihull and Halliwood between January and the end of March, industry sources said, as it tries to prioritize its most profitable models.
JLR and other automakers have been plagued by semiconductor shortages since early 2021. Many automakers cut their orders for computer chips at the start of the coronavirus pandemic, only to find themselves at the back of the queue when demand picked up again.Read:FTX Must Immediately Withdraw Its Fatally Flawed Clearing Application Before the CFTC Because It Is a Systemic Risk
UK car production in October was just over half its pre-pandemic level in 2019, according to data published Friday by the Association of Motor Manufacturers and Dealers, a pressure group.
The UK industry produced 69,524 cars, down 48% compared to 2019, although it was a 7% improvement over last year.
JLR, the UK’s largest carmaker, in November announced a record order book of more than 205,000 cars, but chip shortages have complicated its efforts to ramp up production of new versions of the Range Rover and Range Rover Sport, both of which are made in Solihull. , and Defender, made in Slovakia.
The Solihull plant in the West Midlands will move from one to two shifts at the parts plant producing the lower-priced Range Rover Velar and Jaguar F-Pace, with an extra shift added to produce Range Rover body panels. The Halewood plant on Merseyside will also be reduced to one shift. The plant produces the Discovery Sport and the smaller Range Rover Evoque.Read:Chevron’s Venezuela Operations Hinge On Unlikely Election Talks
The added turmoil comes as JLR’s Indian owner, Tata, is looking for a new CEO for the company, following the sudden announcement that Bollori had resigned for “personal reasons”. The departure has raised questions about JLR’s future strategy, in particular its approach to electrifying its range of products – although the company insists the strategy will remain unchanged.
In the short term, automakers are also likely to face lower demand as the UK goes through an expected prolonged recession and lower living standards.
JLR has been posting losses for the past 18 months, but when presenting the company’s latest financial results in November, Bolloré said he believes semiconductor supplies will improve in the coming months.
“We expect to continue to improve our performance in the second half of the year, as new agreements with semiconductor partners take effect, enabling us to build and deliver more vehicles to our customers,” he said.
JLR has not yet planned to reduce shifts beyond the end of March, and is working to secure its long-term supply of semiconductors. And last month it announced a deal with Wolfspeed in the US to supply silicon carbide semiconductors.Read:The net zero policies that should be torn up to save your wealth
A JLR spokeswoman said: “We continue to actively manage the operating patterns of our plants while the industry is experiencing continued disruption to the global semiconductor supply chain.
“Demand for our vehicles remains strong. We expect our performance to continue to improve in the second half of the year as new agreements with semiconductor partners enter into force, enabling us to build and deliver more vehicles to our customers.”