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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 Bollor, announced his resignation last week, has decided to cut production at factories in Solihull and Halewood between January and the end of March as it tries to prioritize its most profitable models, industry sources said. .
JLR and other carmakers have been suffering from a shortage of semiconductors since early 2021. Many carmakers cut their orders for computer chips at the start of the coronavirus pandemic, only to find themselves at the back of the queue when demand roared back.
UK car production in October was just over half of 2019’s pre-pandemic level, according to data published on Friday by the Society of Motor Manufacturers and Traders, a lobby group.
In the UK, the industry produced 69,524 cars, down 48% on 2019, although a 7% improvement on last year.
JLR, the UK’s biggest carmaker, booked a record order book of more than 205,000 cars this November, but chip shortages have complicated efforts to ramp up production of new versions of its Range Rover and Range Rover Sport, both of which are built in Solihull. , and its Defender, which is made in Slovakia.
The Solihull factory, in the West Midlands, will move to one of two shifts in parts of the factory that produce the low-cost Range Rover Velar and Jaguar F-Pace, while adding an extra shift to make Range Rover body panels. The Halewood plant, in Merseyside, will also be reduced by one shift. The factory produces the Discovery Sport and the smaller Range Rover Evoque.
Further disruption comes as JLR’s Indian owner, Tata, searches for a new chief executive for the business, following the surprise announcement of Bollore’s resignation for “personal reasons”. The departure has raised questions over JLR’s future strategy, and particularly its approach to electrifying its product line-up – although the company insists the strategy will remain in place.
In the short term carmakers are also likely to face lower demand as the UK goes through an expected long recession and falling living standards.
JLR has been loss-making for the past 18 months, but Bollor said in the company’s most recent financial results presentation this November that 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 contracts with semiconductor partners come into effect, enabling us to build and deliver more vehicles to our customers.”
JLR does not yet plan to cut shifts after the end of March, and is working to secure long-term supplies of semiconductors. Last month it announced a deal with Wolfspeed in the US to supply silicon carbide semiconductors.
A JLR spokesperson said: “We continue to actively manage the operational patterns of our manufacturing plants while the industry experiences ongoing global semi-conductor supply chain disruptions.
“Demand for our vehicles is strong. We expect our performance to continue to improve in the second half of the year as new contracts with semiconductor partners come into force, enabling us to manufacture and deliver more vehicles to our customers.
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