Jaguar Land Rover cuts UK production amid Brexit and diesel uncertainty
Jaguar Land Rover (JLR) looks set to cut vehicle production of certain models, citing uncertainty surrounding Brexit and an increase in diesel taxation as primary reasons for the decision.
JLR announced on Monday (22 January) that it will reduce production output for its Discovery Sport and Range Rover Evoque models later this year. Despite the firm enjoying record global sales in 2017, JLR claimed the UK market was “tough”, with demand for new vehicles down 5.7% last year.
Ongoing uncertainty surrounding Brexit was a consideration in the decision to scale back production of the two models, which are produced at JLR’s Halewood plant in Merseyside. Government plans to ban all new petrol and diesel cars and vans from 2040 and new taxes on diesel vehicles were also noted.
JLR said: “The automotive industry continues to face a range of challenges which are adversely affecting consumer confidence. Ongoing uncertainty surrounding Brexit is being felt by customers at home…and in Europe where collectively we sell approximately 45% of total UK production.
“Add to this, concern around the future of petrol and diesel engines, and general global economic and political uncertainty, and it’s clear to see why industry is seeing an impact on car sales.”
According to trade body the Society of Motor Manufacturers and Traders (SMMT), the new car market reportedly fell first the first time in six years in the UK, primarily due to a decline in demand for diesels.
Sales for diesel cars dropped by 20% last year, and fell by almost a third in December after the Autumn Budget introduced a higher tax on new diesel cars. There is a widespread concern about the level of NO2 produced by diesel vehicles, which are now responsible for almost 40% of all NO2 emissions in the UK’s major cities, with policies also announced to combat rising levels.
For example, the world’s “toughest” emission standard came into force in London in October. Vehicles which do not meet the Euro 4 standards for PM and NOx emissions will pay the new fee on top of the Congestion Charge every weekday they drive in the zone from 7am-6pm.
While JLR is stalling diesel production, other carmakers have charged ahead to rollout new electric vehicle (EV) portfolios. In the last few months, Volvo and Volkswagen all unveiled EV initiatives, while Ford has offered a scrappage scheme for older, more polluting vehicles. JLR also announced a new EV initiative for 2020.