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Jaguar Land Rover to cut thousands of UK jobs after China, diesel slump

Reuters  |  LONDON 

By Pitas

LONDON (Reuters) - Britain's biggest carmaker (JLR) is set to cut thousands of jobs as the company faces lower demand in and a slump in sales of diesel cars in

The central English firm builds a higher proportion of its cars in Britain than any other or medium-sized carmaker and has also spent millions of pounds preparing for Brexit, in case there are tariffs or customs checks.

Britain's said on Thursday it is clear why a no-deal Brexit would add to the problems with further costs and disruption.

JLR lost 354 million pounds ($450 million) between April and September 2018 and had already cut around 1,000 roles in Britain, shut its for two weeks and announced a three-day week at its site.

Its warned in September that the wrong Brexit deal could cost tens of thousands of and posed a threat to production at the automaker.

The Tata Motors-owned company, which employs around 40,000 people in Britain and has boosted its workforce at new plants in and in recent years, unveiled plans to cut costs and improve cash flows by 2.5 billion pounds last year including "reducing employment costs and employment levels."

Those cuts will be "substantial" and run into the thousands, the source told

"The announcement on job losses will be substantial, affecting managerial, research, sales, design," said the source, who spoke on condition of anonymity, not affecting production-line staff "at this stage."

The company declined to comment when contacted by on Thursday.

also said on Thursday it will cut thousands of jobs in Europe, exit unprofitable markets and discontinue loss-making vehicle lines as part of a turnaround effort aimed at improving profit margins in the region.

BREXIT WARNINGS

JLR, which became Britain's biggest carmaker in 2016, had been on course to build around 1 million vehicles by the turn of the decade, reported on Thursday a 4.6 percent drop in full-year sales to just under 600,000 vehicles.

Demand in China, which had once been one of its strongest countries but has since been hit by a slowdown, fell by 21.6 percent, the biggest drop of any of its markets.

"The economic slowdown in along with ongoing trade tensions is continuing to influence consumer confidence," said

Diesel accounts for 90 percent of the firm's British sales and 45 percent of global demand, the company said last year, as demand in the segment tumbles following new levies in the wake of the 2015 emissions cheating scandal.

The firm's said in October that the firm's in China "has basically been closed for most of October in order to allow the inventory of both our vehicles and inventory to start to reduce."

Like fellow automakers, the company could see its three British grind to a halt in fewer than 80 days if lawmakers next week reject a deal by Theresa May, leading to tariffs and customs checks after a no-deal outcome.

"Given the difficulties that they're going through... to add further costs and further disruption from a no-deal Brexit, it's clear why they've been so clear that this would be against their interests," said

BMW-owned is also taking steps to prepare for a no-deal Brexit but called on the government to prevent that outcome.

"We urge the government to avoid any hard Brexit," said

(Reporting by Pitas; Editing by Guy Faulconbridge/Keith Weir)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Thu, January 10 2019. 17:02 IST
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