UK’s biggest automaker, which is to shut down vehicle production at its Halewood factory in Merseyside for nine days this month, saw China sales fall off a cliff in late January. Tony McDonough reports
Jaguar Land Rover (JLR) sales in China slumped by 85% in February due to the disruption caused by the coronavirus, its parent company Tata Motors says.
The UK’s biggest automaker, which is to shut down vehicle production at its Halewood factory in Merseyside for nine days later this month, said sales in China grew strongly in the first three weeks in January before falling off a cliff.
Plummeting Chinese sales are particularly worrying for JLR as the market in the country had been key to its recovery. Sales in China have risen 24% over the past year, in contrast to sales falls in other global markets.
Biggest sellers in China have been the Evoque and the Discovery Sport models. JLR has also said it plans to cut around 500 permanent and agency staff at Halewood over the next few months. Its current workforce numbers around 4,500.
At its three UK plants, including two in the West Midlands, JLR assembles around 400,000 vehicles a year and it is feared the lack of supplies from China could hit production. In February chief executive Ralf Speth said there was a risk that vital parts would not be available.
In a statement on the coronavirus crisis, Tata Motors said: “Our first priority has been the health and safety of our employees.
“Shanghai-based JLR China & Chery Jaguar Land Rover staff have been working from home since the end of the lunar holiday and the offices and JV plant reopened in the week of February 24. Production will be ramped up as the number of employees returning to work and demand increases.”
On the sales slide, it added: “Jaguar Land Rover sales in China grew on average about 25% year on year for the six months from July through December 2019 and we continued to see strong growth for the first 3 weeks of January.
“The coronavirus has significantly impacted China sales with February retails down around 85% versus the prior year. In the first half of the month about 20% of dealers were open which has since improved to now over 80% although most are still operating with reduced staffing and facilities.
“Jaguar Land Rover expects this to improve over the course of March, however, retail sales are expected to recover more gradually. The spread of the virus to other markets such as South Korea, Japan, and Italy will also impact sales in those markets.
JLR’s supply chain is primarily based in Europe and the UK, with a relatively small percentage of direct parts from China. Over 95% of its tier 1 and tier 2 suppliers in China are now open but at reduced capacity and the company is engaged with its suppliers on the status of their sub-tier suppliers in China.