There’s no doubt that 2018 has been a tough year for Jaguar Land Rover – but 2019 is set to be even tougher.
Wind the clock back a year and the situation couldn’t have been more different to the storm clouds gathering right now.
A year ago the Coventry car maker was still growing, turning over a handsome profit and talking about all sorts of exciting plans for the future – electrification, new models, a new factory in Slovakia and much more besides.
Following on from its sale by Ford and good stewardship by owners Tata, Jaguar Land Rover really seemed to have the Midas touch.
It was a great news story – not just for the 40,000 people employed by the car maker in the UK – but for the many tens of thousands more working in the automotive supply chain.
Quite some time back Jaguar Land Rover’s UK boss Jeremy Hicks reckoned that Jaguar Land Rover supported around 100,000 jobs in the UK – that figure was probably a conservative estimate even then and there’s no doubting it has since grown.
So, where did it all go wrong?
Car making is a difficult business at the best of times. Hundreds of millions of pounds – sometimes billions – have to be spent developing new models.
Those models take a long time from inception to coming to market and the car makers have to get pretty much everything right.
That is challenging in itself but from Jaguar Land Rover’s perspective (with the possible exception of the Jaguar XE saloon), they seem to have hit the spot every time.
The first sign that things were not good this year was when Jaguar Land Rover CEO Ralf Speth started sounding alarm bells about Brexit.
Footage below of the all-new Range Rover Evoque – a crucial model for Jaguar Land Rover in 2019
Dr Speth said a bad deal or no deal could be catastrophic for the company and as the warnings intensified he concluded that such a scenario could force production overseas and wipe out its profits.
The Brexit business would be bad enough in itself, but Jaguar Land Rover has had two more huge problems to deal with.
The first is falling demand for diesel cars.
The car maker is not at fault here. As part of its long-term planning it invested heavily in diesel and most of the cars it sells are diesels.
For a long time this was all fine and dandy – until the UK government (and European governments too for that matter) decided diesel was a dirty word.
To some extent the car maker had put all its eggs in one basket but doing so seemed a shrewd move. That is no longer the case.
Jaguar Land Rover is pushing hard to deliver electric cars but as yet has only one model – the Jaguar I-Pace.
If Brexit and declining diesel demand weren’t enough the company then discovered it had another big problem on its hands – China.
It’s not that long since car makers couldn’t get enough of China – it was like some automotive Alaskan gold rush.
The car maker has a factory over there as part of a joint venture with Chinese car maker Chery.
But sales have plummeted in China.
The most recently monthly sales figures revealed they had fallen by 50 per cent compared to the same month in 2017.
It’s not just Jaguar Land Rover that has problems in China though, even big-hitters like Audi, BMW and Mercedes-Benz are suffering.
It is blamed on a number of things, including changes to tariffs on imported cars and Donald Trump’s trade war with China.
The Chinese situation is a somewhat murky one though and there may be more to it than that.
Anyway, any of these three things – Brexit, diesel and China – happening on their own in a give year would cause major problems.
But to have to try and deal with all three at once really is a very big problem.
It has perhaps rather aptly been described as a perfect storm – so, can Jaguar Land Rover weather that storm?
It’s going to be tough but let’s hope for the sake of the region’s automotive sector and UK car making as a whole that it can. Ultimately there’s a lot riding on it – not least those 100,000 plus jobs.
On the subject of jobs there will almost inevitably be job cuts.
The company has already shed more than a thousand agency workers and hundreds more will be let go.
A turnaround plan has also been announced which will see savings of £2.5 billion.
That’s a substantial sum and there’s no doubt whatsoever that some of those savings will be achieved by shedding staff.
On a positive note though what is going to be happening that is good?
As part of moving production of the Land Rover Discovery from Solihull to Slovakia Jaguar Land Rover says that will free-up space for electric vehicle production at the Solihull plant.
That could be exciting and if the company does get going on electrification production there then it bodes well for the future.
It also bodes well for Coventry and Warwickshire, given the huge investment that is going into battery development and production.
Despite its woes Jaguar Land Rover is still expanding at its Whitley site and that is likely to continue.
Elsewhere a new production line has been created at Halewood in Merseyside to produce the all-new Evoque, which was recently unveiled.
The previous Evoque had a big hand in propelling Jaguar Land Rover’s incredible growth and its successor is well placed to continue that.
2019 will also see the next Land Rover Defender break cover and while the new version of an automotive icon is unlikely to be a big seller it is a halo car that has a crucial role to play when it comes to inspiring confidence in the brand.
Other than that I wouldn’t imagine ambitious plans for any other new models will be announced, though Jaguar Land Rover will continue with its electrification strategy – to have electrified versions of all its models available by 2022.
Also, don’t be expecting any off the wall moves like buying the Silverstone racing circuit – or something similar.
I expect the car maker will consolidate its operations, continue with research and development, working on future models and pushing towards its electric future.
Of course a lot depends on what happens over the months ahead – particularly when it comes to Brexit and China – but despite having to endure another tough year, Jaguar Land Rover could emerge leaner yet stronger and more focused than ever.
Only time will tell but here’s hoping next year we’ll be talking about a terrific turnaround rather than a dismal decline.