Britain's biggest automaker Jaguar Land Rover will slash around 1,000 jobs and production at two of its factories in the region because of fall in sales caused by uncertainty around Brexit and doubts over diesel policy, a source informed Reuters. Output is expected to be cut as a effect, though the carmaker would not provide forecasts on the reduction. This comes after the demand was at a record high in 2015 and 2016.
"Weaker market conditions in the United Kingdom and Europe, driven by lack of consumer confidence and lower demand for diesels, are impacting our growth", said Felix Brautigam, CCO at the Tata-owned carmaker. Additionally, even the uncertainty of Brexit is being seen as one of the reasons. The outlet notes that 90 percent of the company's vehicles are powered by diesel engines. Land Rover accounted for the majority of sales in the last fiscal year, with 439,749 vehicles sold.
Autocar reports the British manufacturer has restricted the layoffs to agency workers, with JLR citing a decline in diesel vehicle sales for the decision.
In Europe, diesel sales decreased 7.9% in 2017 and showed a marked dive of 20.5% in December, according to figures from analyst Jato Dynamics, indicating that the downward trend was gathering pace.
Commenting on JLR's decision, Professor of industry, David Bailey, from Aston University, said: "With the big turn against diesel engines, Jaguar Land Rover is particularly exposed as more than 90 per cent of its United Kingdom sales are diesels".
It is not renewing the contracts of the amount of agency staff at the Solihull site and would be telling staff on Monday about its plans for the 2018-19 financial year. About 362 staff personnel will be moved from the Castle Bromwich facility to Solihull to make up for the dearth of workforce.
Also, Brexit and related issues have made it increasingly hard for JLR to finalise on a strategy.