Jaguar Land Rover is shutting its Halewood factory for 10 days this month and adjusting the production schedule at its Castle Bromwich and Solihull plants because of weak sales.
The Merseyside plant, which employs just under 4,000 people, will close from 19 to 27 March. A spokeswoman said the company informed its workers of the closure on 13 January, before the severity of the virus outbreak became clear.
The Halewood production pause was related to the launch of vehicles such as the Range Rover Evoque plug-in hybrid as well as “to ensure market demand is balanced globally”, the spokeswoman said. The smaller Castle Bromwich and Solihull adjustments reflected fluctuating demand, she added.
In January, JLR, which is owned by India’s Tata Motors, announced the end of the night shift in Halewood, putting 500 jobs at risk.
Halewood and Solihull will also close for a week at Easter and a week at the end of May for Whitsun, in regular holidays that were scheduled in November.
The temporary closure highlights the difficulties facing the automotive industry, even before Covid-19 triggered a sales slump in China. Carmakers are cutting costs to invest in electric cars, while struggling with declining diesel sales.
Many manufacturers have felt the effects of the virus. JLR’s joint venture with the Chinese carmaker Chery in Changshu, near Shanghai, was forced to halt temporarily; it resumed on 24 February.
In January, the carmaker reported increased revenues in the last three months of 2019, but said sales had fallen by 2.3% year-on-year. A strong recovery in China, which accounts for a fifth of JLR’s sales, helped it to return to profit.
Industry experts have suggested JLR and other carmakers with significant exposure to China are likely to face problems as the slump in demand affects factories.
David Bailey, a professor of business economics at Birmingham University, said the hit to demand was the biggest coronavirus-related issue affecting European carmakers, rather than the disruption to supply chains. British-made cars sourced only 5-10% of their parts from China, he said.