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.
The carmaker, whose chief executive Thierry Bolloré last week announced he was stepping down, has decided to cut production at its Solihull and Halewood plants between January and the end of March as it tries to prioritize its most profitable models, industry sources said.
JLR and other automakers have been plagued by semiconductor shortages since early 2021. Many automakers cut their orders for the computer chips at the start of the coronavirus pandemic, only to find themselves at the back of the queue when demand roared back.
Britain’s car production in October was just over half of its pre-pandemic level in 2019, according to data published on Friday by the Society of Motor Manufacturers and Traders, a lobby group.
The UK industry produced 69,524 cars, down 48% compared to 2019, although it was a 7% improvement on last year.
JLR, Britain’s biggest carmaker, in November reported a record order book of more than 205,000 cars, but the parts shortage has complicated efforts to ramp up production of new versions of the Range Rover and Range Rover Sport, which are both made in Solihull, and its Defender, which is made in Slovakia.
The Solihull plant, in the West Midlands, will go from two shifts to one in the parts of the plant that produce the low-cost Range Rover Velar and Jaguar F-Pace, while adding an extra shift to produce Range Rover body panels. The Halewood plant in Merseyside will also drop to one shift. The factory produces the Discovery Sport and the smaller Range Rover Evoque.
The further disruption comes as JLR’s Indian owner, Tata, searches for a new CEO for the business, following the surprise announcement that Bolloré is stepping down 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 that strategy will remain unchanged.
In the shorter term, car manufacturers are also likely to face lower demand as the UK goes through an expected long recession and falling living standards.
JLR has been making losses for the past 18 months, but at the company’s presentation of its latest financial results in November, Bolloré said he believed semiconductor supply would 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 come into effect, enabling us to build and deliver more vehicles to our customers.”
JLR has not yet planned reduced shifts after the end of March, and they have worked to secure their long-term supply of semiconductors. Last month it announced a deal with Wolfspeed, of the US, to supply silicon carbide semiconductors.
A JLR spokeswoman said: “We continue to actively manage the operating patterns of our manufacturing facilities as the industry experiences ongoing global semiconductor supply chain disruption.
“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 force, enabling us to build and deliver more vehicles to our customers.”