Jaguar Land Rover is cutting production at its UK plants until the spring in a sign of its continued struggle for semiconductor supplies amid global shortages.
The automaker, whose chief executive, 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 seeks to prioritize its smaller models. lucrative, industry sources said.
JLR and other automakers have been plagued by semiconductor shortages since early 2021. Many automakers cut back on computer chip orders at the onset of the coronavirus pandemic, only to find themselves at the back of the queue as demand returned to roar.
UK car production in October was just over half of 2019’s pre-pandemic level, according to data released on Friday by the Society of Motor Manufacturers and Traders, an advocacy group.
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 biggest carmaker, reported a record order book of more than 205,000 cars last November, but chip shortages have complicated its efforts to ramp up production of new versions of its Range Rover and Range Rover Sport , both made in Solihull , and its Defender, made in Slovakia.
The Solihull plant in the West Midlands will switch from two shifts to one in the parts of the plant that produce the low-priced Range Rover Velar and Jaguar F-Pace, adding an extra shift to produce the Range Rover body panels. The plant in Halewood, Merseyside will also be reduced to one shift. The factory produces the Discovery Sport and the smaller Range Rover Evoque.
Further disruption comes when JLR’s Indian owner Tata seeks 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, although the company insists the strategy will remain unchanged.
In the near term, automakers are also likely to face lower demand as the UK experiences a long expected recession and falling living standards.
JLR has been loss-making for the past 18 months, but at the company’s presentation of its most recent financial results last November, Bolloré said he believes semiconductor supply will 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 go into effect, which will allow us to build and supply more vehicles to our customers.”
JLR still has no plans for reduced shifts after the end of March and has been working to secure its long-term supply of semiconductors. Last month it announced an agreement with Wolfspeed in the US to supply silicon carbide semiconductors.
A JLR spokeswoman said, “We continue to actively manage the operating models of our manufacturing facilities as the industry experiences continued 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 come into effect, enabling us to build and deliver more vehicles to our customers.”