Deteriorating relations between the UK and China could lead to a boycott of the popular Evoque and Discovery Sport models produced at Halewood. Tony McDonough reports
Carmaker Jaguar Land Rover (JLR) could pay a heavy price fo deteriorating relations between the UK and China.
Chinese state media is reporting that escalating tensions between the two countries over the ban on Huawei building the UK’s 5G networks and the suspension of the extradition agreement with Hong Kong, could have consequences for British firms.
An article in the Global Times, a Chinese Communist Party mouthpiece, specifically mentioned JLR and HSBC. I warned that if the UK “upholds such a hostile attitude toward China, Beijing may have no other choice but to strike at British companies”.
JLR is already under pressure due to the coronavirus crisis and any disruption or boycotts in its key Chinese market would deepen worries for the business, which in June reported an annual pre-tax loss of £422m from revenues of £23bn.
It is particularly concerning for JLR’s Merseyside factory at Halewood. Its Ranger Rover Evoque and Land Rover Discovery Sport are both produced at the plant and both models have proven a hit with Chinese consumers.
JLR is actually owned by Indian industrial giant Tata but has its headquarters in the UK and is very much seen by China as a British business. The Chinese Government has already warned the UK about taking what it described as an “erroneous path”.
The Chinese are also angered at the spotlight on its treatment of Uighur Muslims with widespread reports of people being forcibly transported to work camps.
JLR currently employs around 4,000 people at Halewood in Merseyside, which restarted production in June following the coronavirus lockdown. The company is planning to cut both permanent and agency staff from its sites across the UK in the coming months.
The COVID-19 pandemic, and subsequent shutdowns in many countries, couldn’t have come at a worse time for JLR which, after a turbulent couple of years, had seen a return to profits its second and third quarters, with double-digit sales growth in China.
One of the few bright spots came from the popularity of its Evoque and Discovery Sport models. Evoque sales alone soared 24.7% year-on-year and the company has high hopes now for the “refreshed” Discovery Sport following its March launch in China.