The UK’s largest carmaker is in trouble as sales have plunged almost 50% during the Coronavirus pandemic. Now, the cost-cutting programme introduced by the JLR CEO, Sir Ralf Speth, needs to kick into hyperdrive if the company is to survive.
The Jaguar Land Rover group (JLR) crashed to another massive loss during the lockdown period in the UK, raising the spectre of job losses at the Tata-owned but British-based company as it scrambles to cut costs.
The UK lockdown accounted for a fall of 42.4% in sales with just 76,000 cars sold. Overall revenue fell from just over GBP5 billion to GBP2.9 billion. Lack of demand and shuttered factories have led to an exceptional cost of GBP1.1 billion and an overall loss of GBP413 million for the first quarter of the year.
Since the beginning of last year, the JLR group has been involved in cost-cutting, a process they call Charge+, which has seen them shave off a total of GBP4.7 billion worth of savings as both JLR and their Indian parent, Tata, have struggled to make a profit.
Sir Ralf, who is due to be replaced by Thiery Bollore (below), the former boss of Renault, in September is convinced that the company will emerge from the pandemic with the most advanced product line-up in the history of the company and with a business structure that will deliver long term sustainable profitability.
However, the biggest savings are probably going to be found in their 40,000 strong workforce, and in the unionised environment that is JLR, this may be a hard ask.
