Lift up the bonnet and you'll see Brexit is not driving Jaguar Land Rover’s problems

 
Oliver Gill
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On The Factory Floor At The Jaguar Rover Factory
Agency workers at Jaguar Land Rover's Solihull plant will not be replaced (Source: Getty)

Jaguar Land Rover’s 40,000 British workers will today be furnished with the finer details of how many cars are to roll off the ramps over the next year. Production will be slashed as 1,000 West Midlands jobs are cut at Britain’s biggest carmaker.

The firm's UK sales are down by more than a quarter so far this year; they are 16 per cent lower in continental Europe. These two markets are the destination for almost half of all JLR’s UK built vehicles.

Brexit uncertainty was to blame, many have argued. Car manufacturing is hugely dependent on the consumer's forward planning, so uncertainty around a Brexit trade deal led to one of Britain’s biggest manufacturing success stories being dinked off course.

Read more: Jaguar's first all-electric car goes driverless in tie-up with Waymo

But lift up the bonnet and you’ll see that’s not the whole story.

Hot on the heels of Volkswagen’s 2015 dieselgate scandal, the UK government changed its mind on diesel cars. A U-turn was performed on the commonly held view that diesels’ preferential fuel efficiency meant they were good for the environment.

A well-signposted overhaul came into force in the UK at the start of this month, as diesel cars were slapped with a hefty tax hike. Having slumped 17 per cent last year, sector-wide sales are almost a third lower this year – and that’s before the tax changes even took effect.

The big problem for JLR is this: Nine out of every 10 cars it builds is a diesel.

Read more: Jaguar Land Rover set for job cuts and production changes amid Brexit fears

Volkswagen

Despite all its negative publicity, VW’s diesel nightmare may have been a blessing in disguise. It has forced the German giant to explore new technologies – investors seem to think they are on the right path; even with a number of legal proceedings hanging over the firm shares are up 70 per cent since October 2015.

On Friday JLR stressed it had spent £4bn since 2010 “to future-proof manufacturing technologies”. But experts this weekend pointed out JLR is pitifully behind in its development of electric and hybrid vehicles.

Brexit uncertainty is a neat explanation, particularly as it absolves company management of some responsibility for the firm’s current predicament. For all its critics, Tesla, as well as JLR's more established rivals, are looking to the future. JLR needs to start doing the same. And quickly.

Read more: Jaguar Land Rover slashes UK production amid Brexit fears

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