Dr Jonathan Owens, Lecturer in Operations Management at the University of Salford Business School, and expert in supply chains, comments on Jaguar LandRover’s announcement of 4,500 job losses.
Dr Owens said: “China is the company’s biggest and most profitable export market. However, cautious Chinese consumers have been holding back due to global trade tensions. Also, the normally cordial relationship between JLR and its Chinese sales network has been strained as dealers want better terms and promotional incentives.
“A war of words relating to Brexit and the perceived UK government’s message about owning a new diesel car, and how this may impact the environment, and of course the tax added and value deprecation, has all led to a rapid downturn in diesel car sales, which are predominantly the engines used at JLR. This is a great shame when considering the new generation diesels are ultra low emission produced by the company.
“It is evident the company are making big financial investments; they have appointed Boston Consulting Group to put together the turnaround plan; and technology upgrades to meet its low-carbon commitments. In addition, the company has said there would be an electric option for each of its models post 2020.
“Also, the company has revealed they will is to transfer all production of its Land Rover Discovery model from the West Midlands to a plant in Slovakia by the end of this year and perhaps more production there in the short term, whilst they develop and implement EV production lines in the Midlands.
“So perhaps a significant question is are they moving quickly enough for their traditional market? It appears evident the company has been slow in getting into hybrids and now they have to speed up in getting fully into electric vehicles, especially if they want a piece of the EV market and not be so over reliant on one market.”
