To put it nicely, Jaguar Land Rover (JLR) hasn’t had the best of starts to 2018. Last month it was reported that JLR will cut production of some vehicles due to the uncertain economic future. This is due to Brexit and changes to taxes on diesel cars.
The Discovery Sport and Evoque models will be scaled back in production later this year. This is because the UK market has been tough. This is in sharp contrast to the global market, as sales hit an all-time high for Jaguar Land Rover.
The firm has put the bulk of responsibility of the UK’s tough market on “confusion caused by Brexit”. The demand for new cars are reportedly down 5.7% in 2017 due to the UK’s nuclear economic position. The blame is said to be shared by an increase in taxation on the production and sale of diesel cars. From April 2018, the UK will increase the amount of vehicle excise duty paid by buying a new diesel car. This will have a huge effect on JLR as the majority of their sales (90%) are diesel-powered products. Both of the car models are produced at the Merseyside based plant Halewood. The models will be reduced in production during the summer of 2018. The plant employs around 6000 people and produces three different Range Rover models.
One of the firms other major production plants in Castle Bromwich Birmingham is undergoing “planned, extended shutdowns”. According to some reports, the plant produced no new cars for four weeks over the Christmas period.
The overall profit of Jaguar Land Rover fell around 25% to £192 million. Deliveries for JLR did grow, but a much slower than expected 3.5%. Due to weak demand in Europe and North America.
Bosses say the overall fall in pre-tax profits has been caused by the company investing a huge amount of capital in long-term technological growth.This includes self-driving technology, and electric powered vehicles. Recently, the company has doubled the size of its engine production plant in Wolverhampton and has plans to build a technology centre near its Coventry headquarters in Whitley.
We spoke to Peter, our Director, about this issue and he said the following: “We can evidence from our portfolio of clients that the UK economy remains steady, and overall continues to make positive growth. However, we are also seeing an increase in the take up of our bad debt protection products, which allow clients to protect their sales from potential bad debt risks. There is some nervousness in both construction and manufacturing sectors, that even a small slowdown could produce a ripple effect across the various supply chains. Peak holds a strong base in the West Midlands, which of course creates a concentration of manufacturing clients, so we are working closely with these clients to ensure we keep the credit lines in place which maximises their cashflow.”