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The automotive industry around the world is going through transition with conventional engines getting replace by hybrid and electricity powered engines. However, this transition requires significant amount of investment at a time when many of the auto giants are struggling with continuously falling demand.
As sales fall in the largest markets of China and Europe, Jaguar Land Rover (JLR) went for cost reduction and saving of £2.5 billion, by implementing night shift cuts, which is intended to help the company to invest in the emerging technology. Jaguar Land Rover was pioneer in the automotive space to launch a premium all-electric performance SUV in 2018. In the beleaguered auto industry of the United Kingdom, one of the largest carmakers in Britain, Jaguar Land Rover ended the night shift at its Halewood factory, which can be called a big blow for the employees, putting 500 jobs are at risk. According to recent JLR estimates, around 10 per cent of the jobs at the manufacturing unit are vulnerable. JLR employs about 33,000 workers across the United Kingdom, while its plant near Liverpool, employs around 500 agency workers and little less than 4,000 representatives.
Indiaâs Tata Motors is the parent company of JLR and according to Tata Motors, these job cuts have more to do with improving efficiencies rather than curbing production levels. However, the lesser production volumes were further fuelled by lesser demand for the Land Rover Discovery Sport and the Range Rover Evoque models, being produced at Halewood factory.
This move to free up resources for a cost savings of £2.5 billion, which will fuel major investments in the emerging technologies, supposed to be the future of mobility, has primarily resulted in these job cuts. The development is not only a blow to the workers at Halewood but to the entire UK car industry. The company believes that this move will turn the fortunes for the company as it will help the company enhance its operating efficiencies at the manufacturing unit and will energise them to cater to the demand for their bestselling models, namely, Land Rover Discovery Sport and Range Rover Evoque.
JLR has said that it will manage its workload by introducing a âtwo-plusâ shift system. This will imply that there would be longer working hours (if required), linked with the demand along with early and late shifts. The âtwo-plusâ shift system has already been agreed upon with unions last year.
But this is not one off a case, in January 2019, the company announced 4,500 redundancies across the world, after 1,000 job losses at its Solihull factory in 2018, it had already cut many jobs in recent couple of years. Due to slower growth in sales and due to uncertainty over Brexit along with the future mobility of diesel-powered vehicles, Jaguar Land Rover had planned to cut 1,000 jobs in the West Midlands too. Solihull factory, known for manufacturing Range Rovers and the Land Rover Discovery SUV, employed around 10,000 workers, which included 2,000 contract staff workers, JLR had cut around 1,000 jobs of temporary staff workers to save on cost to company. The gaps created by the job cuts at Solihull was filled by workers from its factory at nearby Castle Bromwich. In the first quarter of 2018, the job cuts at the Solihull factory were probably triggered due to 26 per cent dip in the company sales in the United Kingdom due to uncertainty over Brexit and weaker consumer confidence. Also, in Europeâs biggest car market, Germany sales of the company dropped by 32 per cent during the same period.
In the current scenario, most of the automotive players of the industry in the United Kingdom along with JLR are in a vulnerable state fearing of a hard Brexit, which could possibly exclude UK out of the EU regulations framework. In addition, emissions cheating scandals and the continued decline of diesel cars across Europe, too would impact the growth of the industry.
Other key global automotive players with manufacturing plants in the United Kingdom such as Honda and Ford have decided to shut down operations at Swindon factory and Bridgend engine plant respectively, in the next two years. Not only this, the foreign auto majors have lowered the amount of investment they make in the United Kingdom.
Due to political uncertainty, UKâs car industry, once a top sector in the manufacturing space in the nation has lost its glory. Though, these challenges to cope up with the emerging technology which shall be the future of mobility are taking a toll on the car manufactures all across the globe and not just in the United Kingdom can be said to be impacted.
Recent business performance of JLR
(Source: Companyâs website)
For December 2019, Jaguar Land Rover reported retail sales that was up by 1.3 per cent on previous year to 52,814 vehicles. Jaguar Land Rover retail sales were up by 26.3 per cent in comparison to previous year, a sixth consecutive month of double-digit growth, which were boosted by sales in China during the period. This trading performance shall offset the lower sales in the Overseas markets, which dipped by 7.6 per cent. The company saw lower sales in the United Kingdom and Europe with 2.9 per cent and 5.3 per cent respectively. The company also saw dip in sales of 1.1 per cent in North America.
The new facelift of Land Rover Discovery Sport is gaining traction and sales were up by 19.6 per cent and the new Range Rover Evoque was up by 33.2 per cent, continues to deliver growth for the company. However, the other models of the company saw a decline in sales.
For the third quarter period ended December 2019, Jaguar Land Rover retail sales were down by 2.3 per cent year-on-year to 141,222. The sales from North America and China were up by 1.1% and 24.3% respectively. However, the company witnessed lower sales in the Overseas markets, the United Kingdom and Europe of 11.5 per cent, 11.9 per cent and 10.1 per cent respectively.
The new Evoque saw surge in sales numbers by 30 per cent as well as the Land Rover Discovery saw surge in sales numbers by 4.3 per cent. The new facelift of Land Rover Discovery Sport saw surge in sales numbers by 9.2 per cent as well as the Range Rover Sport saw growth in sales numbers by 2.5 per cent. However, the sales of the other models declined.
Jaguar Land Rover retail sales plunged by 5.9% to 557,706 in 2019 as compared to 2018. This dip in sales can be attributed to prevalent challenges across the automobile industry with sales numbers turning red in China, Overseas markets, Europe and the United Kingdom. However, China in the last six months has witnessed double-digit sales growth followed by North America recording growth of 1.8 per cent.
It is worth mentioning that significant portion of the sales of Jaguar Land Rover across the globe was either hybrid or electric vehicles in the year 2019. In the United Kingdom, 20 per cent of all Range Rover Sport vehicles sold were plug-in hybrids along with 23 per cent of Range Rovers.
