News : JLR to lose 1000 contract staff as sales fall

Carole Nash Classic Insurance Specialists

Jaguar Land Rover has been forced to slim down its headcount in the wake of falling global car sales. The company won’t be renewing the contracts of 1000 contract workers at Solihull. However, it says that it’s still racing to recruit more engineers and apprentices to develop the next generation of cars.

The company, which is the UK’s largest carmaker, blames a slowdown in the global car market and a rapid move away from diesel products in Europe. More than 90% of JLR’s sales are currently diesel-powered cars and the company’s racing to catch the opposition in plug-in hybrid and electric technology.

The move follows the announcement late in 2017 that it would cut car production due to uncertainties over the post-Brexit trading conditions and changes to taxes on diesel cars. Professor of Industry, David Bailey, from Aston University, told the BBC: ‘With the big turn against diesel engines, Jaguar Land Rover is particularly exposed as more than 90% of its UK sales are diesels. JLR has just revealed its full-electric I-Pace model and have indicated offering all-electric or hybrid variants of all their models by around 2021.’

Continuing sales slide is punishing diesels

The backdrop to this story is that sales in the UK are falling back rapidly. In March 2018, the registrations reported by the Society of Motor Manufacturers and Traders (SMMT), were down by -15.7% compared with 2017. Uncertainty over future anti-emissions regulations, the economy and a fall in consumer confidence are all cited as contributing factors.

Demand from business, fleet and private buyers all fell in March, down -14.3%, -15.0% and -16.5% respectively, with diesel registrations slumping massively – down -37.2%. Registrations of plug-in and hybrid vehicles continue to rise, albeit modestly, up 5.7%, with demand for plug-in hybrids driving growth, up 18.2% for the month.

This fall is the twelfth consecutive month in new car sales. According to the SMMT, nearly 720,000 new high-tech, low-emission cars left forecourts in the first quarter of 2018 as consumers took advantage of competitive offers, meaning last month’s market was still the fourth biggest on record.

What the industry says about the drop in UK car sales

With more than 80% of all new car transactions in the retail sector being on Personal Contract Purchase (PCP), the view of car finance expert Graham Hill is interesting. He says: ‘The Government’s mixed messages around diesel and petrol emissions have completely paralysed customer activity in the new car market. To say that this is mixed signalling from the Government and industry is an understatement.’

Simon Benson of AA Cars adds: ‘It’s hard to ignore the fact that, instead of the usual March spike after the introduction of new plates, this is more of a whimper than a bang. Our own data shows that used car sales continue to beat dwindling consumer confidence and rise.’

Mike Hawes, SMMT Chief Executive, said: ‘March’s decline is not unexpected given the huge surge in registrations in the same month last year. Consumer and business confidence has taken a knock in recent months and a thriving new car market is essential to the overall health of our economy.’

Keith Adams

Keith Adams

Editor and creator AROnline at AROnline
Created www.austin-rover.co.uk in 2001 and built it up to become the world's foremost reference source for all things BMC, Leyland and Rover Group, before renaming it AROnline in 2007.

Is the Editor of the Parkers website and price guide, formerly editor of Classic Car Weekly, and launch editor/creator of Modern Classics magazine. Has contributed to various motoring titles including Octane, Practical Classics, Evo, Honest John, CAR magazine, Autocar, Pistonheads, Diesel Car, Practical Performance Car, Performance French Car, Car Mechanics, Jaguar World Monthly, MG Enthusiast, Modern MINI, Practical Classics, Fifth Gear Website, Radio 4, and the the Motoring Independent...

Likes 'conditionally challenged' motors and taking them on unfeasible adventures all across Europe.
Keith Adams

Latest posts by Keith Adams (see all)

52 Comments

  1. Perhaps it would help if new cars weren’t so damned ugly and aggressive looking.
    Perhaps this is what Mr 2018 thinks he is looking for?

  2. Who’d have thought 40 years ago that Mercedes would have two cars in the top ten, which then was dominated by the British Big Four? Back in 1978, Mercedes, even the cheapest cars, were considered only for the seriously well off, and cost considerably more than their rivals from Ford, Rover, Volvo and Audi. Now it seems the A Class is outselling cars like the Vauxhall Astra.
    Yet while obviously Britain has become better off in the last 40 years, which means Mercedes have become more affordable, another explanation is Mercedes, with their A class, are pitching their cars at people who normally buy Ford Focuses. Also, attractive leasing deals with service plans and free insurance means a Mercedes can be yours for not much more than a Ford, and you have the option of handing the car back after 3 years if you can’t afford to pay off the remaining finance.

    • Shocking to not see the Astra in the top 10, no wonder Ellesmere port is laying off workers, as people are just not buying it.

      It feels wrong that the Golf outsells the Focus (even allowing for a new model on the way). Ford UK used to be a nice earner for Ford, not any more…

      • Given the new Focus has just launched and can be ordered now, I suspect availability of the outgoing model will have been limited during Q1 as production change overtakes place. The fact Ford now produces the Focus at only one plant (Saarlouis) in Europe limits the opportunity to flex production during model change over. In any case March 2018 figures generally are massively skewed by the March/April tax change last year. Buyers where encouraged to move earlier to catch £20 and £30 cars. This has impacted on sales figures throughout last year and this. Brexit uncertainty just compounds things.

      • Agreed. in fact it’s wrong to see the VW Golf thing anywhere near the top 10, let alone 2nd best selling car in the land. Utterly depressing. It’s about time JLR started targeting VW Group with like for like rivals and clawed their home market back. Mind you, I cannot see why anyone would buy a VeeDub in the first place, so devoid of personality and bland, not too mention the dodgy emissions scandal. Their PR company have done them proud.

    • Well maybe not 40 but certainly 10. When you can get a 3 series on personal lease for under 300 a month why buy a mainstream model? The non-premium makers are dying, going the way of the non-smart phone and the am radio.

  3. Why is the new Astra not selling? Vauxhall say it’s because people want SUVs now. But the (old outgoing model) Focus is still up there in the top 5. The Golf is up there at number 2. And the number 1 Fiesta isn’t an SUV.
    The Astra is nice looking. Perhaps it’s not aggresive enough for Mr and Mrs 2018 Self Important Tailgater.

  4. There is something very strange indeed about these figures, and it illustrates very well the dangers of playing with percentages : if one compares the March 2018 figures with those for the year to date, in nearly every case the sales in March have exceeded the combined January/February sales by a factor of about 2.5 : 1 . This suggests that both the weather and the plate change have been more of a factor this year

  5. Problem is everyone is jumping ship to Petrol engines means last year the C02 output across the world went up!

    Diesels are not the problem – it’s old diesels and not looked after ones that cause most of the problems, as well as VW trying to cheat the system. This can easily be sorted – in India a guy has invented a filter to put on Diesel generators which converts the soot into ink. No one mentions the thousands of extra vans delivering online purchases that may have caused this?

  6. Sorry to see workers in Solihull losing their jobs but how can anyone be surprised about this when the government has increased taxes on a) new diesel cars and b) new cars with a list price more than £40k

  7. They’re losing sales because:

    1.) They bet wholesale on diesel and didn’t forsee the shift to hybrid and electric cars
    2.) Their range has become muddled, especially the Jaguar models, which have lost their distinctiveness
    3.) Two of their key models, the XE and new XF, have failed on the market and they are now trying to make up for the mistake by remarketing Land Rover SUV platforms as Jaguar
    4.) They are almost entirely wedded to the premium SUV market, which is at its peak and about to fall into a decline
    5.) Their products are grossly overpriced and their build and material quality not sufficient to justify the price

    I’ve been banging on for several years that JLR have the wrong strategy and here is more evidence of it. I do hope they can get their act together quickly enough to avoid being sucked down the plughole by market forces. A lot of jobs depend on them.

    • I’d say that the diesel demonisation was very fast, however the iPace and upcoming leccy XJ shows that they are catching up with electric propulsion.

      Agree that the range is muddled, however I see Jaguar was quite logical (XE = 3/C/A4, XF = 5/E/A6, XJ = 7/S/A8, EPace = X3, FPace = X5) – it is Land Rover that I see as muddled.

      Used to be Defender if you wanted a workhorse – Discovery if you wanted a more ‘civilised’ workhorse – Range Rover for luxury
      Then Freelander as an entry level ‘crossover’. And RR Sport as an almost ‘entry’ level luxury SUV for those who didn’t need the full fat version

      However now with Velars and Evoques, Discovery and Sport version which look very similar barring the jarring offset numberplate, but have moved upmarket to lower-premium, the range makes less sense than Aston Martin of a few years ago.

  8. Seems a bit odd that the cuts seem centred on Solihull even though some workers are apparently being transferred from Castle Bromwich. No mention of job losses at the i54 engine plant or Halewood? 1,000 seems a large number – surprised they didn’t make it 950. How many will be natural wastage, eg skilled European assembly workers leaving the UK due to Brexit/reduction in Euro value of wages?

    • There are no “skilled European assembly workers leaving the UK due to Brexit….”. This is a reduction in short-term, zero hours, contract employees. They are employed because they are cheap and easy to get rid of.

  9. I’m from Solihull and very much want JLR to be a success, but I have to say I agree with the comment above about its overall plan and position. The manufacturers can tell me all they like about new diesels being clean. They may be for the first and maybe second owner, but I’m sure I’ll one day be following one belching black smoke over the footpath on my way to work, like I do every day when the owner can’t afford the stupid prices to repair them. I wouldn’t trust any manufacturer after the VW farce and my cat could have seen the reaction against diesel coming, whether merited or not. The Jaguar range is confused as others have observed.

    I have been puzzled by a related question. I’ve seen the TV show about the police car repair workshop in Cheshire a few times. Apart from the enourmous amount of time spent umming and ahhing, why are there no JLR interceptor cars on the fleet? I only see BMWs (Peugeots as beat cars – why not Astras I could add?). Does anyone know why? Are they unreliable, expensive or just not good enough? It seems odd.

    My advice to JLR might include stopping blaming everyone else and think about where it is going.

    • I think you’ll find it has more to do with the Police buying on price and BMW offering eye watering levels of discount, They will have the marketing budget to support the discounting.

  10. Black smoke from a diesel is only because of lazy servicing and lax maintenance, if maintained and looked after, diesels are not as bad as you might think :

    (a) blue smoke at start up in the mornings is not a fault of the car, they ALL do that, but this soon goes away as the engine warms up,

    Whereas (b) black smoke from a diesel is the fault of dirty or clogged injectors, nothing that an inspection and service can’t cure.

    Modern cars trucks and vans are appearing on the market which utilize Ad-Blue in addition to diesel which helps cut nitrous oxides in the exhaust gases and remove the soot that acceleration and deceleration causes cleaning up of the engine’s dirty deeds making things more acceptable from an eco point of view.

    • Nitrous oxide is laughing gas, and is not a problem with ic engine emmissions. Nitrogen oxides and nitrogen dioxide is though. Petrol engines are not immune to these issues either.

      • Nitrous Oxides (NOx) is not laughing gas at all, it is a natural byproduct of burning diesel in a compression ignition diesel engine that IS present in the exhaust gases and DOES CAUSE health problems especially in persons with respiratory problems.

        Ad-Blue in association with SCR technology and other useful innovations that most modern diesels possess, takes out the NOx and reduces the soot emitted for a healthier result and better air quality.

  11. If JLR had introduced Ad-Blue diesel vehicles perhaps there would not be a dramatic decline…..as I’ve pointed out, these ARE much cleaner.

      • No you must be right, in fact i saw them at a funfair blowing up balloons with an old diesel Passatt. And people in inner city areas are increasingly speaking like Donald duck. It must be Nitrous oxide!

  12. Nitrous oxide ( N2O) is laughing gas,and was widely used as a dental anaesthetic – and indeed for labour pains – up till the 1980s , when the incidence of fatal accidents with it became unacceptable. It is NOT a by product of combustion . The very harmful by product of combustion ( particularly at very high combustion temperatures ) is NO2 – Nitric oxide – which, when it combines with water vapour in the atmosphere frequently becomes ( very dilute ) nitric acid, and even in its uncombined state is very toxic /corrosive to lung tissue because of course it can combine with body fluids to produce hyperacid states

    • Anthony is not alone with this missunderstanding. I read the same in the Telegraph (online). Real sloppy journalism. Its not surprising that VW thought they could con us….
      Unfortunately JLR are taking the pain, diesels make JLR products running cost possible for a larger group of incomes. The backlash against diesel effectively reduces JLRs potential market volume in Europe. Most VW products will not be effected in this way.

    • Thanks for that concise description Christopher. I’ve just worked out that I’m spending just over £100 a year in Adblue in the Rangie (90 litres at £11.50 per 10 litres from Morrison’s) and it’s money well spent as far as I’m concerned

  13. Anthony is not alone with this missunderstanding. I read the same in the Telegraph (online). Real sloppy journalism. Its not surprising that VW thought they could con us….
    Unfortunately JLR are taking the pain, diesels make JLR products running cost possible for a larger group of incomes. The backlash against diesel effectively reduces JLRs potential market volume in Europe. Most VW products will not be effected in this way.

  14. I think JLR’s Ingenium engine programme has been a bit of a disappointment too. Reviews for the 2L diesel have been pretty poor, and the 2L petrol engine isn’t a class leader either.

    The changeover from Ford to their own engines hasn’t delivered the boost they might have hoped for.

    • Hmm, so you’re trusting the reviews, then? My wife has had a 2 litre turbodiesel Mercedes, followed by a 2 litre turbodiesel BMW and now drives a 2 litre turbodiesel Jaguar XE.

      Yes, the massively long gearing means it’s not quite as responsive as the Beemer was, but it’s quieter, smoother and a nicer engine, generally. For a diesel, obviously…

      Oh, and yes, it uses AdBlue

  15. We are a fickle lot. One moment banging on about how wonderful Bretit is and how we will show Johnny Foreigner. Now we slag off our largest UK centred car manufacturer. Who needs enemies in the UK when you have the indigenous population. Next it will be the break up of GKN by the city wideboys and we will then bemoan that AFTER the event.
    This sort of nonsense would not happen in Germany, France etc..
    Support UK manufacturing, engineering and science.

  16. Regardless of the recent JLR revivial, from what I have seen personally, the product quality and engineering is just up to the same level as the German competition.

    Perhaps this is the start of the customers recognising this.

    • What is it that keeps this old chestnut returning?

      I’m on my 6th JLR product in a row and they seem okay to me. I’ve never seen the appeal of many German cars; the last one I seriously tried was a (then new) 520d Touring in 2011 and it left me cold. Later on, I tried a Freelander 2 2.2 Diesel and there was no contest. I’ve happily been buying their cars ever since.

    • Exactly – it is up to the standard of the German competition, so I’m not sure what point you’re trying to make?

  17. @ John, reliability surveys in recent years don’t place BMW very highly and Audi, unless you buy an A5 or A6, are just Volkswagens with a bigger price tag. However, I will admit to liking Mercedes, their cars look like they’re hewn from granite and are excellent to drive. Also they seem to have beaten a reputation for rusting that appeared on early noughties cars.

    • Used to like Mercedes, even their smaller saloons eg. 190 felt like little Limos.

      Not now though, sat it one and it felt as grey and basic as an old Fiesta.

      And they lost the bonnet badge, preferring the vulgar tacky big grille badges.

  18. Note as well, Nissan are laying off 700 staff due to a slump in diesel sales. It does seem that manufacturers who produce crossovers and SUVs over here, which are mostly diesel powered, are suffering.

  19. My next company car is going to be an XF estate. My MB 300h estate was uncomfortable and not very reliable. Also the bottom has fallen out of the secondhand market for hybrids. Then residuals are terrible meaning that leasing costs have risen. To get MB 300h again it would have cost £100 extra a month compared with 3 years ago when it was a new model. Normally mid-;life cars are cheaper. Our leasing chap says residuals have gone South.

Leave a Reply

Your email address will not be published.


*


WordPress spam blocked by CleanTalk.