Jaguar Land Rover: Just how bad are things for car maker?

Warwickshire Telegraph - - NEWS - By ENDA MULLEN

THE prospect of three-day weeks and fac­tory shut­downs might sound like we’ve stepped back in time to the grim days of the UK car in­dus­try in the 1970s but sadly we are talk­ing about the here and now.

Just a few weeks ago Jaguar Land Rover an­nounced a three-day week at its Jaguar plant in Cas­tle Bromwich in the run-up to Christ­mas, and now it was re­vealed there will be a two-week shut­down of its Soli­hull plant from late Oc­to­ber.

When the Jaguar plant three-day week was an­nounced, the Coven­try car maker cited Brexit un­cer­tainty and plum­met­ing de­mand for diesel cars as the main rea­sons.

Both those fac­tors would have a dam­ag­ing ef­fect in their own right but com­bined they could rightly be seen as po­ten­tially crip­pling.

How­ever there’s a fa­mil­iar phrase that bad things some­times come in threes and sadly that would seem to be the case as far as Jaguar Land Rover is con­cerned.

The com­pany now faces a three­p­ronged as­sault on its con­tin­ued good for­tunes due to de­clin­ing sales, par­tic­u­larly in China.

This was the key rea­son cited for the two-week Soli­hull shut­down.

Jaguar Land Rover re­vealed that Septem­ber sales slid by 46 per cent in what is now its largest mar­ket.

The com­pany said there was good rea­son for that, in that im­port tar­iffs on cars made over­seas have been re­duced in China, which meant buy­ers were de­lay­ing their pur­chases.

How­ever, it should be stressed that those re­duc­tions came into ef­fect on July 1, mean­ing a bounce­back of sorts might have been ex­pected by now.

Per­haps one of the wor­ry­ing things about Jaguar Land Rover scal­ing back cur­rently is that for so long the com­pany did noth­ing but grow.

It was seen by many as the au­to­mo­tive equiv­a­lent of the goose that laid the golden egg.

There was even talk of elec­tric car pro­duc­tion com­ing to Coven­try and Soli­hull.

That is start­ing to seem like a dis­tant mem­ory though, again due to Brexit un­cer­tainty.

Jaguar Land Rover CEO Ralf Speth re­cently said that the com­pany would hold fire on mak­ing any de­ci­sion on elec­tric car pro­duc­tion in the UK un­til there is greater clar­ity on how trade will op­er­ate in post-Brexit Bri­tain.

CEO’s warn­ingsPre­vi­ously he has warned of prof­its be­ing wiped out, job losses and pro­duc­tion be­ing moved over­seas.

Of course in the midst of the cur­rent mire maybe it’s ad­vis­able not to get too maudlin over what the fu­ture might hold.

Jaguar Land Rover is still Bri­tain’s big­gest car maker and con­tin­ues to be a shin­ing ex­am­ple of how his­toric and highly re­garded au­to­mo­tive mar­ques can rein­vent them­selves for the mod­ern world.

It’s also worth point­ing out that the car in­dus­try by its very na­ture faces lots of chal­lenges and has to demon­strate a level of flex­i­bil­ity that’s rarely re­quired in other sec­tors.

While the cars that roll off the lines are mass pro­duced, they are high end, ex­pen­sive lux­ury items and the com­pany can­not af­ford to stock­pile them, or con­tinue build­ing them if they are not sell­ing fast enough.

These are cer­tainly wor­ry­ing times for Jaguar Land Rover, and in par­tic­u­lar the com­pany’s UK work­ers, but it re­ally is one of the great sur­vivors in what is an in­tensely com­pet­i­tive in­dus­try where only the strong sur­vive.

Let’s just hope its three-day week and fac­tory shut­down are a sign of pru­dence and good plan­ning, rather than hit­ting the panic but­ton.

enda.mullen@reach­plc.com

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