Jaguar Land Rover has unveiled the next phase in a major restructuring of the model line-up and manufacturing set-up, called Charge and Accelerate. The UK’s largest carmaker’s ambition is to transform itself from a company heavily dependent on diesel sales in Europe – confirming that all new models from 2020 will be electrified – either with Mild Hybrid (MHEV) integration, PHEV or BEV.
The company’s CEO Ralf Speth says that plans for heavy investment in electrification and further dissemination of production globally will ensure the long-term survival for Britain’s largest carmaker. Jaguar Land Rover’s recent announcement that it intends to reduce its global workforce by around 4500 people made international headlines last week – a number made worse because it’s in addition to the 1500 people who left the business in 2018.
However, Speth adds: ‘We are taking decisive action to help deliver long-term growth, in the face of multiple geopolitical and regulatory disruptions as well as technology challenges facing the automotive industry. The Charge and Accelerate programme combines efficiency measures with targeted investment, safeguarding our future and ensuring that we maximise the opportunities created by growing demand for Autonomous, Connected, Electric and Shared technologies.’
The first signs of this transformation of the business will be additional investment into electrification with Electric Drive Units to be produced at the Wolverhampton Engine Manufacturing Centre and a new Battery Assembly Centre to be established at Hams Hall, near Birmingham.
Sliding sales lead to reinvention
Group sales of Jaguar and Land Rover fell by 4.6% in 2018 over 2017, while demand in China fell by more than 20% as local buyers tighten their belts due to mounting trade uncertainties. To counter the reliance on diesel in a market rapidly turning away from this fuel, JLR intends to accelerate its BEV, MHEV and PHEV programmes. From 2020, all new Jaguar Land Rover vehicles will be electrified, and the recently-launched Range Rover Evoque will only be offered with one model that isn’t electrified in some way.
With a model programme that should see the entire range renewed by 2024, the big questions are how much of it will be electrified and how rapidly. Although the I-Pace beat rivals from Audi and Mercedes-Benz to the market, the German marques’ follow-ups are coming thick and fast. We know that the new Defender will offer PHEV and probably BEV versions, too, as will the next Jaguar XJ and F-Type, but will these models be enough to keep the company at the sharp end of the electrification race?
The company says: ‘So far, the Charge and Accelerate programme has identified over £1bn of improvements, with more than £500m already realised in 2018. The savings and improvements achieved will enable Jaguar Land Rover to fund vital investments into technology to safeguard its future.’
In the short term, Charge and Accelerate needs to deliver £2.5bn in cost reductions and cashflow improvements over 18 months as well as long-term strategic operating efficiencies in order to see this ambition through. The next phase of this programme will begin with a voluntary redundancy programme in the UK. This strategic review will create a leaner operation with a flatter management structure. The question is whether JLR is strong enough to whether the storm, given that its annual production of 600,000 makes it a minnow compared with premium market rivals.
Investment in factories – expanding expertise in electrification
Later in 2019, next-generation Electric Drive Units (EDU) will be produced at JLR’s Engine Manufacturing Centre in Wolverhampton. These EDUs will be powered by batteries assembled at a new Jaguar Land Rover Battery Assembly Centre in Hams Hall, reinforcing the company’s commitment to the West Midlands and the UK. The Battery Assembly Centre will be one of the largest of its kind in the UK, using new production techniques and technologies to manufacture battery packs for future Jaguar and Land Rover vehicles.
In 2018, JLR opened a new vehicle manufacturing plant in Nitra, Slovakia, where the Discovery will be built, and the I-Pace is built in Austria, underlining the company’s global ambitions. In addition, it made further investment into specialist engineering hubs in the Republic of Ireland, Hungary and Manchester. In the same year, Jaguar Land Rover also confirmed plans to invest in its Solihull plant to support the introduction of the next generation Range Rover and Range Rover Sport.
Prof. Dr. Speth concludes: ‘The next chapter in the story of the Jaguar and Land Rover brands will be the most exciting – and challenging – in our history. Revealing the Defender (below), investing in cleaner, smarter, more desirable cars and electrifying our facilities to manufacture a future range of British-built electric vehicles will all form part of building a globally competitive and flourishing company.’