No change in plan to close unit: JLR

Though sales picked up in the last few months, it will still implement cost-cutting measures.

Tata Motors-owned Jaguar Land Rover (JLR) today said it had no plans to reconsider an earlier decision to close one of its plants in the UK — a decision that is expected to enable production rationalisation and cost-saving. An announcement on this, as scheduled originally, will be made by the middle of 2010.

The Sunday Times, citing an unnamed company source, today said JLR was reconsidering its decision to close one of its midlands plants in the UK. The reason, the paper said, was the improving sales of its premium and luxury cars.

While it is true that JLR sales have picked up in the last few months, it will continue to implement its cost-cutting measures, one of which is to rationalise production between its three assembly plants in the UK.

In September 2009, when the economic outlook was still bleak and JLR was forced to cut costs, the company said it would rationalise production between two of its midlands plants. The company, however had also said there would not be any additional job cuts on account of this move, even as planned and voluntary redundancies would continue in all its plants.

Though the company has not made any specific announcements on which plant it is likely to close, it was generally understood that the plant at Halewood will be spared, while one of its midlands plants, either in Castle Bromwich or Solihull, will be closed. The company as a whole employs around 14,000 people and the three assembly plants employ close to 9,000 workers — 5,000 in Solihull, 2,000 in Castle Bromwich and 1,800 at Halewood. Castle Bromwich makes some Jaguar models, Solihull makes the Land Rover Defender and Discovery, the Range Rover Sport and Range Rover, and Halewood makes the Jaguar X-Type and Land Rover Freelander models.

Since the start of 2010, JLR has reported impressive improvement in sales. JLR’s global sales in March 2010 were 23,538 vehicles, higher by 43 per cent. Jaguar sales for the month were 4,642, higher by eight per cent, while Land Rover sales were 18,896, higher by 55 per cent. However, cumulative sales of JLR for the financial year are 193,982 units, lower by 11 per cent. Cumulative sales of Jaguar are 47,418, lower by 24 per cent, while cumulative sales of Land Rover are 146,564, lower by six per cent.

The improvement in sales of JLR has been witnessed only in the recent months. Apart from the March 2010 figures, this is further demonstrated by improving sales numbers reported for February 2010 as well. JLR global sales in February 2010 were 17,197 vehicles, higher by 60 per cent. Jaguar sales were 3,292, higher by 55 per cent, while Land Rover sales were 13,905, higher by 62 per cent.

Apart from new cost-cutting measures, the company has also revamped its top management. Par has brought in Carl Peter Forster, former head of General Motors Europe and Ralf Speth from BMW to lead the company’s turnaround. The start of 2010 also saw the exit of the then CEO David Smith, who had spent 18 months to revamp the company’s operations.