Jaguar Land Rover's flagship Solihull plant began a two week shutdown today (Monday 22nd).
Christian Stadler, professor of strategy at Warwick Business School, said:
"JLR is one of many UK car manufacturers heading into troubled waters.
"This shutdown is a short term measure, but the company has already laid off 1,000 jobs across the Midlands this year and more cuts will follow if things don't get better with Brexit and China.
"That will be the biggest worry hanging over the workers and unions during the next fortnight.
"China is their biggest market, but the Chinese economy is growing at its slowest rate for a decade and the country is embroiled in a trade war with the US. Car buyers in China are worried about making big investments as they are concerned about what the future holds.
"Brexit is another major problem for the company. Car manufacturing is the most integrated industry between the EU and UK.
"The supply chain typically crosses the channel six times, back and forth, before a car is finished. If there is a no-deal Brexit and border controls are implemented it would cause massive disruption.
"It is hard for JLR to move production to Europe because its biggest market is China, not the EU. Firms like BMW already have big production facilities in Europe, so the incentive to move there is greater.
"I don't see JLR moving production, but I do see sales suffering as they will have to put up their prices due to the increased cost of tariffs.
"Tougher regulation on diesel cars is also hurting JLR and that is only going to get worse if the Government heeds calls brings forward the ban on new petrol and diesel cars by eight years to 2032.
"The move to electric vehicles is a problem for many of the big manufacturers, as it will see new competitors come into the market and eat up the market share. Tesla is an obvious example, but there are many Chinese players back by the Chinese Government, while the big US tech comapanies are looking at their own mobility solutions. These will be long-term threats for JLR."
ENDS
