Jaguar Land Rover stops work at English sites over semiconductor shortage

Jaguar Land Rover

Jaguar Land Rover has suspended production at two of its three car manufacturing sites as a worldwide shortage of computer chips forces the global automotive industry to slam on the brakes.

Thousands of workers at the Halewood plant on Merseyside and the main Jaguar factory at Castle Bromwich in the West Midlands are to be stood down from Monday for an unknown amount of time.

Carmakers have been competing with other electronics producers to secure supplies of semiconductors as they race to recover from last year’s pandemic-induced production shortfalls.

During lockdowns, global production of semiconductors — vital components for computer and high-voltage electrical systems — was diverted to smartphones, tablets, personal computers and gaming devices that were in huge demand.

As carmakers restarted production, they found that the burgeoning Chinese automotive sector, which has emerged from the pandemic faster than the rest of the world, had bought up much of the available stock.

The semiconductor industry, which has been dealing with its own pandemic-related issues, has been unable to meet the demand. This was exacerbated by one-off situations such as a harsh cold snap in Texas halting the work of a key supplier.

Semiconductor manufacturers have been warning that demand will outstrip supply for some time to come, with sources suggesting that the dislocation in the market could take two years to settle down.

In addition, there is changing demand from an automotive industry that is producing more electric cars as well as increasing the number of autonomous features within vehicles. Cars are also expected to connect with increasing “infotainment” features, which has led some to call modern vehicles “smartphones on wheels”.

There is barely a global car, van or lorry manufacturer that has not raised the alarm over semiconductor shortages. Jaguar Land Rover said: “Like other automotive manufacturers, we are experiencing some Covid-19 supply chain disruption, including the global availability of semiconductors, which is having an impact on our production schedules and our ability to meet global demand for some of our vehicles.

“As a result, we have adjusted production schedules for certain vehicles which means that our Castle Bromwich and Halewood manufacturing plants will be operating a limited period of non-production from Monday April 26. Manufacturing continues at our Solihull plant.”

Solihull is the group’s largest production facility, predominantly manufacturing its best-selling Range Rovers.

The statement continued: “We are working closely with affected suppliers to resolve the issues and minimise the impact on customer orders wherever possible.”

The shortage comes at a frustrating time for a company that is trying to put five poor years behind it. A mixture of Brexit uncertainty, its over-dependence on vehicles with unfashionable diesel engines and the pandemic have resulted in years of billion-pound losses and thousands of job cuts.

It is also a setback for the Castle Bromwich plant, which is being shut down as part of Jaguar Land Rover’s belated push to cut carbon emissions.

With plans to make the Jaguar brand all-electric — the “Tesla of the West Midlands” as some have dubbed it — production volumes, weak for some years, will be low and production is being switched to Solihull. The company is also increasingly moving production to its lower-cost plant in Slovakia.