China trade tensions and import duty changes blamed for decline in overseas demand
Jaguar Land Rover’s Solihull factory has begun a planned two week shutdown, following a significant decline in global sales in September.
The company had already begun adjusting the output of its factories in response to market demand, with 2000 workers at the Castle Bromwich factory responsible for the Jaguar XE, XF and XJ saloons moving to a three-day working week until after the Christmas period. The Solihull plant shutdown will last for two weeks until the 5th of November, with no jobs affected by the closure and customer cars would still be delivered on time.
“As part of the company’s continued strategy for profitable growth, Jaguar Land Rover is focused on achieving operational efficiencies and will align supply to reflect fluctuating demand globally as required,” a JLR spokesperson said. “The decision to introduce a two-week shutdown period later this month at Solihull is one example of actions we are taking to achieve this.
“Customer orders in the system will not be impacted and employees affected will be paid for the duration of the shutdown.”
Worldwide sales of 57,114 cars in September was a 12.3% decrease compared with the same month last year, despite what JLR calls “strong” demand for new luxury models such as the Range Rover Velar and the electric Jaguar I-Pace.
The Chinese market suffered the biggest decline, at a significant 46.2% – a slip the company blames on changes in import duty and continued trade tensions holding back consumer demand. European numbers also decreased by 4.7%.
JLR’s UK sales fell by just 0.8% in September, bucking the industry-wide decline of 20.5%. Several factors can be attributed to the slump, including shrinking demand for diesel models, reduced interest in saloon cars and ongoing Brexit uncertainty.
Unite, the UK’s biggest union for car workers, said a “triple whammy” of Brexit uncertainty, government confusion over diesel and ministers’ half-hearted support for electric vehicles was threatening the future of the UK car industry.
“Government ministers’ trashing of diesel, despite the UK making some of the cleanest engines in the world, combined with their shambolic handling of Brexit, is damaging the UK car industry and the supply chain,” Unite national officer Des Quinn said. “Over the past decade, Jaguar Land Rover workers have worked tirelessly to turn the car maker’s fortunes around. Ministers now risk turning them and their colleagues in the supply chain from hero to zero.”
Jaguar Land Rover CEO Ralf Speth has previously condemned the lack of certainly in the market, saying that if the right Brexit deal is not secured, “tens of thousands” of jobs could go at the firm. The company currently employs 40,000 people across the UK, with many more linked through JLR’s supplier network.
The company has refused to rule out more permanent changes, saying it is «continuing to over-proportionally invest in new products and technologies and are committed to our UK plants, in which we have invested more than £4 billion since 2010, to future-proof manufacturing technologies to deliver new models.”