Yahoo Finance Jaguar Land Rover forced to cut production as microchip shortage bites
Jaguar Land Rover is being forced to cut the production of cheaper models at at least one of its plants as it battles a worsening parts crisis.
The car maker (JLR) will move to one shift per day from two at its Solihull plant for its Range Rover Velar and the Jaguar F-Pace models for the first three months of the new year, while cuts at another factory in Halewood are also being considered. No jobs will be lost.
Sources said that in common with many other car makers, JLR will funnel the chips it can obtain into higher-priced vehicles like the Range Rover and Range Rover Sport, where production will increase.
Car makers are two years in to a global shortage of computer chips which has halved the output of UK factories.
The crisis has been blamed on chip makers switching to producing higher-spec models after car production was halted during the lockdowns of the pandemic, and consumer electronics companies increased demand amid a scramble for home entertainment and remote working equipment.
Another factor is the slow production cycle of cars compared to other goods using chips.
Some models from around the globe are using chips designed 10 years ago, which fewer and fewer plants are producing. High safety demands make certifying new chips slower than for a maker of a smartphone or television. At the same time, newer car designs require ever more of them to connect everything from automatic headlamps to cruise control.
The move comes after the surprise departure of the company's chief executive Thierry Bollore, who the company said was stepping down for personal reasons last week. Owner Tata, the giant Indian conglomerate which also owns the Port Talbot steelworks and the Tetley tea brand, is looking for a replacement.
JLR said: “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. 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.”
The Guardian newspaper reported the production cut earlier.
