Jaguar Land Rover bosses admitted they have been flying car parts into the country in suitcases due to difficulties in the supply chain from China caused by the outbreak of the coronavirus.
The UK’s biggest car maker, which produces around 400,000 motors a year, has three vehicle manufacturing plants in the UK – all of which rely on components delivered from China.
JLR boss Ralf Speth said the factories could run out of parts in two weeks due to the strangled supply following the outbreak of the deadly virus.
Supply shortage: Jaguar Land Rover bosses confirmed that car maker has been forced to fly vehicle components into the UK from China in suitcases due to the outbreak of coronavirus
Speaking at the official opening of the National Automotive Innovation Centre at Warwick University in Coventry on Tuesday, Speth – who is due to stand down from his role as JLR chief executive in September – said production was safe for the next two weeks but in three weeks’ time will have ‘parts missing’.
He went on: ‘We have flown parts in suitcases from China to the UK.’
In a later interview with Sky News, he added: ‘This is an issue for the complete car automotive industry.
‘We don’t know how long it will take before the supply chain comes on stream again in China.’
Jaguar Land Rover’s manufacturing headquartered in Changshu, China, has been closed for an extended period for the Lunar New Year, though is due to re-open next week, albeit with a limited supply of components available, Speth admitted.
Ralf Speth said at an event held in Coventry on Tuesday that the current supply of parts at JLR’s three UK car plants could start to run out after two weeks
All three UK car plants – two in the West Midlands and one in Merseyside – all rely on parts shipped from China
Speth was speaking at the opening of the National Automotive Innovation Centre at Warwick University Coventry on Tuesday. JLR used the event to unveil this Project Vector self-driving electric pod that will be used for autonomous trials on UK roads next year
His comments came during the opening of the Coventry automotive technology centre, which was attended by Prince Charles.
The event was used by JLR and owners Tata Motors to unveil the new ‘Project Vector’ self-driving electric pod, which will be used for an autonomous vehicle trial on UK roads in the midlands from next year.
Guenter Butschek, the boss of Tata, also spoke at the launch about the impact of the coronavirus outbreak on JLR’s operations.
‘We are safe for the month of February and for a good part of March,’ he said.
‘Are we fully covered at this point of time for the full month of March? Unfortunately not.’
The UK’s biggest car maker announced earlier this year that it is cutting jobs at its Halewood plant in Merseyside due to declining demand for new vehicles
It also announced full day and half day halts to assembly lines until the end of March at the Castle Bromwich and Solihull vehicle plants in the West Midlands
Jaguar Land Rover remained the UK’s biggest car maker in 2019, though outputs at the brand’s three plants fell by 14.3%
Commenting on JLR’s admission it has flown car parts in suitcases, professor ManMohan Sodhi from Cass Business School at City, University of London said: ‘Two things characterise the mass auto manufacturers – low inventories at the auto plants and geographically concentrated suppliers.
‘Toyota suffered for these very reasons in the tsunami of 2011, and Honda suffered in the Thai floods the same year.
‘Now it is 2020 and Jaguar’s supply sources in China have been hit. The auto industry has been hit with the Evonik fire in 2012. Obviously, it is hard for the industry to de-risk its supply chain from geographical concentration.
He added: ‘In any case, now Jaguar has to see if there is a fall-back option in case manufacturing doesn’t pick up in China in March.
‘One fall-back may be India, where the auto sector has seen a massive slowdown and therefore will have adequate capacity to provide alternative sources for Jaguar.
‘Whether Jaguar can get such suppliers and their supplies qualified in a reasonable amount of time is another story.’
Brexit uncertainty has also taken a toll on UK car makers, not least Jaguar Land Rover, which produced 64,000 fewer units in 2019 than it did the year previous
JLR is one of the car makers hit hardest by the falling demand for diesel vehicles, with its recent vehicle range swung heavily towards using oil-burning powerplants
Efforts to combat the coronavirus outbreak – which has so far killed 1,800 people in China – has resulted in factory shutdowns and movement restrictions in the world’s second-largest economy.
It has had a global impact of the export of goods to customers, even hitting giants such as Apple, which confirmed this week that it will suffer damages due to the outbreak.
The impact on JLR is just the latest in a number of headaches endured in recent times.
The brand has suffered immensely from the fall in demand for diesel cars, resulting in thousands of job losses and reduced hours at UK manufactuing plants.
At the beginning of the year it confirmed there were to be 500 job losses at its vehicle production plant at Halewood, Merseyside.
And earlier this month the firm announced it has been forced to halt production on selected days over a four-week period from late February at its Castle Bromwich factory in the West Midlands and also stop assembly lines on some half- and full days at the nearby factory in Solihull until the end of March.
The car maker has also been hit with battery supply issues for its I-Pace electric car – though believed not to be linked to the coronavirus outbreak – which has forced an ‘adjusted production schedule’ at the firm’s production facility in Graz, Austria.
It comes at a time when it – along with all other mainstream car manufacturers – are being forced to heavily invest in the development of electric vehicles and self-driving technology.
Brexit uncertainty has also taken a toll on UK car makers, not least JLR, which posted a 14.3 per cent decline in outputs last year.
It’s three auto factories produced 385,197 vehicles last year – some 64,000 fewer than they did in 2018.
As a whole, UK car production across all makers fell to its lowest level in almost a decade in 2019.
Vehicle outputs were down 14.2 per cent to 1.3 million cars – the lowest since 2010, the Society of Motor Manufacturers and Traders revealed last month.
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