JLR is expected to announce it will cut 4.000 jobs. Although the figure has not been officially confirmed, the company behind Land Rover and Jaguar has stated it has informed employees about a voluntary redundancy program.
Things have not been going smoothly for JLR, the UK’s largest car manufacturer, which employs around 30.000 people in the country alone.
In the second quarter, car volumes dropped 9.2% year-over-year, resulting in a 9.6% decline in revenue. Profits fell to £109 million for the quarter, down from £351 million a year earlier. Free cash flow is negative, just like last year. A recovery plan including redundancies is in the making.
A wide range of negative factors
JLR is facing a number of difficulties that have led to financial troubles. The company is investing heavily in development. An £18 billion five-year investment program is in full swing, while current sales are down. Jaguar’s transition to an all-electric brand means it has halted the production of almost all its ICE cars.
The Type 00 concept car was not well received, and the new Jaguar Type 01, a four-door electric GT, will only be revealed on October 6th. The commercial launch of the model will follow in 2027.
Land Rover model lines like the Range Rover and Defender remain popular, but other models suffer from competition of cheaper Chinese SUVs.
Sales in the US are impacted by tariffs, while the Chinese market is less keen on Land Rover models than before, a trend many western luxury brands face. On top of that, the geopolitical situation with the wars between Russia and Ukraine, and in the Middle East, don’t help the company’s sales.
Last year, production of Land Rover models was also impacted by a cyberattack. And this year, production of Range Rover and Range Rover Sport models had to be temporarily halted at the company’s Solihull plant because of a fire at a supplier factory in Norway.
Recovery plan
The redundancy program, which is reported to cut 4.000 jobs over the next two years, is part of a wider recovery plan. The original ‘Reimagine’ strategy has been adapted to include more electrified ICE drivelines for Land Rover models instead of mainly switching to full BEV.
Except for Jaguar, which is still set to become a full-electric brand. The plan should make JLR profitable at around 300.000 vehicles per year.
The smaller volume will need to go hand in hand with higher-margin vehicles and more options in the popular Range Rover and Defender lines.
The Range Rover Electric has been launched, and a new Range Rover GT is on the way. JLR has also teamed up with Chery to revive the Freelander brand, using Chery’s architecture and technology. With help from Stellantis, JLR is also eying production in North America.
For Jaguar, the Type 01 will represent a high-priced, high-margin vehicle. It will have to rebuild the brand, leaving behind volume models it previously sold at lower profit margins. Whether or not the plan succeeds will become clearer in 2027.
And the UK as a manufacturing country?
UK Business Secretary Jonathan Reynolds is set to meet with JLR’s leadership this week to try to reduce the job loss at the company. But the UK car manufacturing business as a whole might need a boost.
Union representatives point to years of underinvestment, an unsustainable push for EVs, and high industrial energy costs compared with other parts of the world.
Meanwhile, a government representative says the UK has already taken action to back the country’s automotive business. Those include lower electricity bills for manufacturers, R&D funding for EV development, and an electric grant to encourage people to buy EVs.
