Credit Crunch Hits Jaguar Hard

Jaguar has joined a growing list of car makers to cut production as the credit squeeze and economic downturn continue to hit sales. The now Indian-owned company said it was responding to market conditions by “taking a little bit of volume” out of production of the flagship XJ sports saloon – the current model of which is likely to be replaced next year – and the XK sports car.

Jaguar would not spell out the extent of the cuts at its Castle Bromwich factory in Birmingham, but The Birmingham Post understands that between 200 and 300 fewer cars will be built between now and the end of the year.

That would equate to about a week’s worth of production for both the XJ and XK. Production of the XF saloon car, which has been a huge success since it was launched in March, and for which Jaguar has a big advance order book, is not thought to be affected. The company did confirm, however, that 280 workers transferred from sister company Land Rover’s Solihull factory to help meet the high initial demand for the XF have now returned to Lode Lane.

Jaguar sales have risen by about 13 per cent so far this year thanks to the global popularity of the new car but Land Rover has lost ground as high fuel costs hit sales of 4x4s. Land Rover has already announced cuts in production, including the suspension of the Range Rover night shift and four-day working on some other lines, as its sales ebb away from the record levels seen in the past three years.

Jaguar and Land Rover, which were taken over by Tata Motors in June in a £1 billion deal with previous owner Ford, will reduce volumes even further by extending the annual autumn shutdown in October from one week to two.

Production levels are also under review at Jaguar Land Rover’s plant at Halewood on Merseyside which produces the Land Rover Freelander and the Jaguar X-Type. “The actions we are taking currently do not involve lay offs or redundancies, although this cannot be ruled out in future,” a JLR spokesman said yesterday.

With car sales falling throughout Europe, Toyota is cutting production of Auris and Avensis cars at its UK plant at Burnaston, near Derby, while Bentley has moved to a three-day week at Crewe. Analysts say the industry is suffering from the credit squeeze – which is making it harder for dealers to get three-year consumer finance deals underwritten by the banks – and the general economic downturn.

On a brighter note, British buyers get their first chance to see the new MG TF sports car today as dealers around the country stage a series of open events to showcase the roadster. The vehicles on display, all produced at Longbridge, are special editions called the TF LE500 and will retail for £16,399.

The limited edition cars, produced to mark the rebirth of the iconic brand, feature a host of extras to try and entice buyers. Features include 16” alloy wheels, premium in-car audio with iPod connector, leather seats, upgraded brakes, rear parking sensors and a hard top. Although only 500 of the special editions have been made, they are already proving popular, with around 80 per cent pre-sold.

Once the initial 500 are sold, the factory will revert to producing basic specification vehicles although the extras will be available as options. The company’s Chinese owner, Nanjing Automobile (NAC), a division of Shanghai Automotive, has so far signed up around 50 dealers in the UK and Ireland. It plans to move into the mainland European market next spring and English-speaking markets such as the Middle East and South Africa beyond that.

The new MGs are planned as the start of a new family of cars to be produced at Longbridge. NAC has said it intends producing a new mid-range car at the factory from next year followed by a series of others including a new sports car to replace the TF.

Staff

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