More than a thousand jobs are to go at Jaguar Land Rover after the carmaker fell to a £501 millon pre-tax loss in the first three months of the year.
The company, which employs about 33,000 people in Britain, will cut contractors and agency workers.
Jaguar Land Rover said that it had fallen into the red between January and March after sales dropped by a third as the spread of Covid-19 forced countries into lockdown.
The company is owned by Tata Motors and is part of a wider Tata global empire that also encompasses the Port Talbot steelworks in south Wales and Tetley Tea. It assembles cars at factories in Solihull, Castle Bromwich and Halewood and has an engine plant at Wolverhampton and corporate and research and design headquarters in Coventry.
It is Britain’s largest automotive employer, with a huge supply chain in the West Midlands and beyond.
The quarterly loss meant that Jaguar Land Rover fell into the red for its financial year after previously being on course to make a profit.
It announced a loss of £422 million loss in the year to March. This compares with a £3.6 billion loss in 2018-19 as a result of collapsing demand in China and politicians and consumers turning their back on diesel vehicles, previously the group’s stock-in-trade.
The carmaker sold 109,000 vehicles worldwide between January and March, down from 158,000 in the same quarter last year. For the 12 months as a whole, sales were down by 12 per cent at 508,000. Sales fell by 20 per cent in its emerging markets of Brazil, Russia and South Korea and were down 9 per cent in China, once its largest market. In the UK sales fell by 9.6 per cent to 106,000, while American sales fell 7.5 per cent.
The only two models of vehicle that it sold more of for the year were the relaunched £31,000 Range Rover Evoque, up 16,900 at 85,100; and the new £64,000 electric Jaguar I-Pace, up by 4,500 at 15,900.
It had high hopes this year for the launch of the redesigned Land Rover Defender. However, the factory that produces the vehicle in Slovakia, along with plants in Solihull and Halewood, was closed until the middle of last month because of lockdowns. The Jaguar factory in Castle Bromwich has yet to reopen.