Jaguar Land Rover cuts 1,000 contract jobs due to diesel sales slump

Jaguar Land Rover (JLR) will not renew the contracts of around 1,000 agency workers at its Solihull < UK plant due to industry challenges caused by falling diesel car sales.

The company said in a statement that “continuing headwinds” have forced it to make "adjustments to production schedules and the number of agency staff”.

It continued: “We are, however, continuing to recruit large numbers of highly skilled engineers, graduates and apprentices, because we are over-proportionally investing in new products and technologies.

“We also remain committed to our UK plants, in which we have invested more than £4 billion since 2010 to futureproof manufacturing technologies to deliver new models.”

JLR, Britain’s biggest car manufacturer, employs 40,000 people in the UK, of whom a quarter work at Solihull.

Although JLR has refrained from confirming the number of affected staff members, Autocar understands that 1000 contracts will not be renewed at Solihull and around 350 workers at the Castle Bromwich plant will be relocated to Solihull.

This change is happening because output at Castle Bromwich, which builds Jaguar models, has fallen as demand for new cars has fallen.

Longstanding effects of the ongoing diesel emissions scandal, which include the raising of tax on diesel cars, has driven down demand for diesel cars so that they now represent just 33.5% of the new car market – a 10.5% decrease on last year. Diesel demand fell by 37.2% last month.

Jaguar's XE and XF are understood to have been affected most heavily by this, although almost every model has been impacted because diesels account for around 90% of JLR's sales.

This year has been one of major contrast for JLR. Following on from a record-breaking 2017, in which the company sold 621,109 cars, Jaguar demand is down 26% in the year-to-date and Land Rover – the group’s bigger brand – has lost a fifth of demand in the UK.

Professor David Bailey of Aston University, an expert in the car industry, said that the latest sales results have hit JLR particularly hard, although he highlighted the brand's ongoing international success.

"It’s important to recognise that, globally, the firm is still doing very well: it’s still investing heavily in new technology, and it’s still hiring engineers, apprentices and graduates," he said. "But there’s no getting away from the impact that the government’s diesel tax has had, sowing extra confusion among drivers who are holding off on replacing diesels."

JLR said in January that it would cut production numbers at its Halewood plant due to slowing new car sales, which a company spokesman linked to "concern around the future of petrol and diesel engines" and "general global economic and political uncertainty”.

JLR’s response to changing market demand is already underway, with its first purpose-built electric vehicle, the Jaguar I-Pace, due on roads this summer. The firm has pledged to produce an electrified variant of every model in its range by 2020 as it "works towards a cleaner future”.

You might be interested in:
JLR India plots 10-model assault in FY2019