Jaguar Land Rover will reduce production at its UK plants until spring as a result of its ongoing struggle to source semiconductors in the face of global shortages.
According to industry sources, the carmaker’s chief executive, Thierry Borlee, announced last week his resignation. It has decided to reduce production at Halewood and Solihull between January and March in order to prioritise its most lucrative models.
Since early 2021, JLR and other carmakers have been affected by shortages in semiconductors. Many carmakers reduced their orders for computer chips during the coronavirus pandemic. However, they found themselves at the backend of the queue after demand surged.
According to data released Friday by the Society of Motor Manufacturers and Traders (a lobby group), UK car production was just half of the pre-pandemic levels of 2019.
Although it was a decrease of 48% over 2019, the UK’s automotive industry produced 69 524 cars. However, it was a significant improvement of 7% from last year.
JLR, the UK’s largest carmaker, reported this November a record order book of over 205,000 cars. However, the chip shortage has hampered its efforts to increase production of new Range Rover and Range Rover Sport models. Both are made in Solihull and Defender is made in Slovakia.
Solihull’s factory in the West Midlands will change from two to one shift in the areas that produce the Range Rover Velar and Jaguar F-Pace at lower prices while adding an additional shift to make Range Rover body panels. Merseyside’s Halewood plant will also be reduced to one shift. The factory produces the Discovery Sport as well as the smaller Range Rover Evoque.
Further disruption is expected as JLR’s Indian shareholder, Tata searches for a new chief executive for the company. This comes after Bollore unexpectedly resigned for “personal reasons”. Although the company insists that the strategy will not change, questions have been raised about JLR’s future strategy and how it plans to electrify its product range.
As the UK experiences a long and expectedly severe recession, car manufacturers will likely face lower demand in the short term.
JLR has been losing money for the past 18 months, but Bollore stated that he believes that the supply of semiconductors will improve over the next few months at the company’s November presentation.
He stated that he expected to continue improving his performance as new agreements with semiconductor partners take effect. This will allow him to deliver more vehicles to clients.
JLR has not planned to reduce its shifts after March 31st, but it has been working hard to ensure that it has a longer-term supply. It announced last month a deal to supply silicon carbide semiconductors through Wolfspeed in the US.
JLR spokeswoman said that they continue to manage the operations of their manufacturing plants despite the disruptions in the global semiconductor supply chains.
“Demand for the vehicles continues to be strong. As new agreements with our semiconductor partners come into effect, we expect to see continued improvement in our performance. This will allow us to deliver more vehicles to clients.
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