Jaguar Land Rover is slashing production at its UK factories until spring as a sign of its continued struggle to source semiconductors amid the global shortage.
The automaker, whose CEO, Thierry Bolloré, announced his resignation last week, has decided to cut production at its Solihull and Halewood plants between January and the end of March as it tries to prioritize its most profitable models, sources said. industry.
JLR and other automakers have been plagued by semiconductor shortages since early 2021. Many automakers cut their orders for the computer chips at the start of the coronavirus pandemic, only to find themselves at the back of the line as demand picked up again.
UK car production was just over half of its 2019 pre-pandemic level in October, according to data published Friday by the Society of Motor Manufacturers and Traders, a lobbying group.
The industry in the UK produced 69,524 cars, down 48% on 2019, although it was a 7% improvement on last year.
JLR, the UK’s largest carmaker, reported a record order book of more than 205,000 cars in November, but chip shortages hampered its efforts to ramp up production of new versions of its Range Rover and Range Rover Sport, both of which are made at Solihull. to perform. , and its Defender, made in Slovakia.
The Solihull plant in the West Midlands will move from two shifts to one in the sections of the plant that produce the lower-cost Range Rover Velar and Jaguar F-Pace, while an additional shift will be added to produce Range Rover body panels . The Halewood plant, in Merseyside, will also rely on a single shift. The factory produces the Discovery Sport and the smaller Range Rover Evoque.
The further disruption comes as JLR’s Indian owner, Tata, starts looking for a new CEO for the company, following the surprise announcement of Bolloré’s resignation for “personal reasons”. The departure has raised questions about JLR’s future strategy, and in particular its approach to electrifying its product range – though the company insists the strategy will remain unchanged.
In the shorter term, automakers are also likely to experience lower demand as the UK faces an expected long recession and declining living standards.
JLR has been loss-making for the past 18 months, but when the company presented its most recent financial results in November, Bolloré said he believed semiconductor supplies would improve in the coming months.
He said: “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.”
JLR has not yet made any plans for fewer services beyond the end of March and has been working to secure longer-term semiconductor supplies. Last month, it announced a deal with Wolfspeed, in the US, to supply silicon carbide semiconductors.
A JLR spokeswoman said: “We continue to actively manage the operating patterns of our factories as the industry faces ongoing 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 take effect, enabling us to build and deliver more vehicles to our customers.”