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JLR may cut production in UK; cites semiconductor shortage

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Tata Motors’ British luxury car brand Jaguar Land Rover (JLR) may look at cutting production at its UK factories owing to the semiconductor shortage.

The cutting of production at its factories in Solihull and Halewood will be between January and the end of March, per a report in Guardian.

The carmaker mentioned the issue of semiconductor shortages that were impacting its production and deliveries during the September quarter results of its parent company Tata Motors. JLR presently has an order book of 2,05,000 units and has witnessed an impact on business operations after lockdowns in several cities in China since March.

In addition, Thierry Bollore, CEO, stepped down recently citing personal issues. Bollore had also pointed out earlier the semiconductor and supply chain issues due to the pandemic that impacted the company. However, the company stated that a long-term agreement for the semiconductor issue is being finalised.

‘Strong demand’

“We continue to actively manage the operational patterns of our manufacturing plants whilst the industry experiences ongoing global semiconductor supply chain disruption. Demand for our vehicles remains strong,” a statement said.

The carmaker is expecting to improve its performance as the semiconductor issues get sorted. “We expect our performance to continue improving in the second half of the year, as new agreements with semiconductor partners take effect, enabling us to build and deliver more vehicles to our clients,” JLR added.

“Production of our new Range Rover and Range Rover Sport has ramped up, improving revenue, margins and cash flow, despite continuing semiconductor constraints,” Bollore had said during the September quarter results announcement.

JLR volumes were constrained even as the revenue was up 36 per cent y-o-y and 20 per cent q-o-q at £5.3 billion in that quarter. The company has reported losses for seven consecutive quarters, according to Bloomberg data, most recently reporting a loss before tax of £173 million ($206 million) in the September quarter.

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Published on November 25, 2022

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