Britain’s biggest carmaker Jaguar Land Rover has announced job cuts in the thousands as the Warwickshire-headquartered company faces a slump in demand in China and in sales for diesel cars in Europe.
The company builds a higher proportion of its cars in Britain than any other major or medium-sized carmaker and has spent millions of pounds preparing for Brexit, in case there are tariffs or customs checks.
JLR reported a loss of £354 million between April and September. It cut around 1,000 UK jobs, shut its Solihull plant for two weeks and announced a three-day week at its Castle Bromwich site.
Jonathan Browning, chair of the Coventry and Warwickshire Local Enterprise Partnership (CWLEP), said: “This is clearly a difficult day for Jaguar Land Rover and its employees.
“Adverse market developments, heightened business uncertainty, relentless global competition and other external factors beyond their control, mean companies have to sometimes make painful decisions to safeguard their long-term futures.
“While details are yet to fully emerge, we hope that the nature of these cuts will have a limited effect on the supply chain across our area, but obviously will be damaging individually and will be felt locally.
“However, our economy is strong and Coventry and Warwickshire has seen the fastest productivity growth of all LEP areas in recent years.
“We have seen growth across many sectors particularly in legal and professional services, energy, engineering consultancy and civil engineering, logistics, tourism and IT services giving us a balanced economy.
“We have a quality labour force, some leading-edge companies as well as two highly-regarded universities, so we remain a very attractive place in which to do business both for local companies and also international investors.”
Louise Bennett, chief executive of the Coventry and Warwickshire Chamber of Commerce, said: “The news of any job losses is always damaging – both for the individuals it affects and also the wider economy.
“But the fact that this is Jaguar Land Rover, which is such a major employer in our region and such a key player in the wider economy, brings that into even sharper focus.
“Until the full details emerge, we won’t know the exact extent of the impact on Coventry and Warwickshire but it’s vital that partners across the region come together to do all we can to work with the company, individuals affected and the supply chain.
“It must be remembered however that Jaguar Land Rover continues to invest extensively in and outside the region, while our wider economy remains strong.”
In December Jaguar Land Rover reported total retail sales of 48,160 vehicles in November 2018, down 8.0% year-on-year reflecting continuing challenging market conditions in China while other major markets were up, it said.
In October, Jaguar Land Rover opened a state-of-the-art (£1bn) manufacturing facility in Nitra, Slovakia, the first time a UK automotive company has opened plant in this country.
In its media release at the opening, the company said: “With the heart and soul of its business in the UK, Jaguar Land Rover’s investment in Nitra marks the latest step in the company’s global expansion strategy following the opening of its Chinese joint venture in 2014 and Brazilian plant in 2016, supported by contract manufacturing in India from 2011 and Austria from 2017.
“The creation of new international factories allows Jaguar Land Rover to offer its customers even more exciting new models, protect against currency fluctuations and support a globally competitive business.”
On the Slovakia facility opening, Chief Executive Ralf Speth, said: “Global businesses require global operational footprints. While Jaguar Land Rover’s heart and soul remain firmly anchored in the UK, expanding internationally only enriches and strengthens our UK business. Today’s opening of our next generation manufacturing plant in Nitra, Slovakia represents the start of a new era in manufacturing for Jaguar Land Rover. It is the latest milestone in our long-term globalisation programme and the culmination of four years planning. As with our existing manufacturing facilities located in the UK, China, Brazil, India and Austria, this high-tech plant in Slovakia will complement and support our corporate, R&D and engineering functions headquartered in the UK.”
Sales of new cars in the UK declined for the second year in a row in 2018 against a backdrop of political uncertainty.
According to the figures released by the Society of Motor Manufacturers and Traders (SMMT) annual registrations fell to 2,367,147 units which is a decline of 6.8% on the figures from 2017.
Private, fleet and business registrations were all down in 2018, with the biggest losses felt in the fleet sector which was 7.3% while private motorists and smaller business operators registered 6.4% and 5.6% fewer new cars.
But it was diesel vehicles where the biggest hit came with sales figures down almost 30 % in 2018. The SMMT said December was the 21st consecutive month of decline for the fuel type vehicles.