Jaguar Land Rover is cutting production at its UK factories until spring in a sign of its continued struggle to source semiconductors amid a global shortage.
car manufacturer whose Chief executive Thierry Bollore announced his resignation last weekIndustry sources said it has decided to cut production at factories in Solihull and Halewood between the end of January and March as it tries to prioritize its most profitable models.
JLR and other carmakers have been grappling with a shortage of semiconductors since early 2021. Several carmakers cut their orders for computer chips at the start of the coronavirus pandemic but have found themselves unable to market. When the demand roared back at the back of the queue,
UK car production in October was just over half of 2019’s pre-pandemic level, according to data published on Friday by the Society of Motor Manufacturers and Traders, a lobby group.
In the UK the industry produced 69,524 cars, down 48% on 2019, although it was an improvement of 7% on the previous year.
The UK’s biggest carmaker JLR recorded a record order book of more than 205,000 cars this November, but chip shortages have complicated efforts to ramp up production of new versions of its Range Rover and Range Rover Sport, which Both are made in Solihull. , and its Defender, which is made in Slovakia.
The Solihull factory in the West Midlands will go from two shifts to one shift in parts of the factory that produces the low-cost Range Rover Velar and Jaguar F-Pace, while adding an extra shift to make Range Rover body panels. The Halwood plant in Merseyside will also fall in one shift. The factory produces the Discovery Sport and the smaller Range Rover Evoque.
Further disruption comes in the form of JLR’s Indian owner, ByeFollowing the surprise announcement of Bollor’s resignation for “personal reasons”, the business looks for a new chief executive. The departures have raised questions over JLR’s future strategy and in particular its approach to electrifying its product line-up – although the company says that strategy will remain unchanged.
Car makers may also face lower demand in the short term as the UK is going through a crisis expected prolonged recession and falling living standards,
JLR has been loss-making for the past 18 months, but in the company’s most recent financial results presentation this November, Bolloré said he believed semiconductor supply would improve in the coming months.
He added: “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 manufacture and deliver more vehicles to our customers.”
JLR has not yet planned reduced shifts after the end of March, and is working to secure long-term supplies of semiconductors. 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 manufacturing plants while the industry experiences global semi-conductor supply chain disruptions.
“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 manufacture and deliver more vehicles to our customers.