As per news reports, Tata Motors Ltd-owned British luxury carmaker, Jaguar Land Rover (JLR), has restored three-fourth of its budgeted production in China, with Chery Jaguar Land Rover Automotive Co Ltd or CJLR’s manufacturing plant in Changshu, gradually resuming operations from third week of February, restoring its production capacity to 75% of pre-COVID19 levels.
Ramped-up production at the China unit will provide a big relief to JLR and Tata Motors, as the company’s sales nosedived 85% in the country in February. Tata Motors had warned its stakeholders that due to the COVID-induced crisis, JLR’s full year EBIT margin may reduce by 1%. FY2019 was a tough year for JLR in China. CJLR’s capacity utilization in that year was about 30-35%. However, the company saw year-on-year volumes increase during Q2-Q3 FY2020 and it was recovering when coronavirus crisis struck. While the accurate budgeted production volumes for the month of April are unknown, analysts suggest that CJLR produced an average of 4,500 – 5,000 cars per month during the first quarter of 2020. The company aims to further ramp up production for the months of May and June to catch up with year-on-year volumes in the first quarter of 2021.
CJLR is a 50:50 joint venture between China’s Chery Automobile Company Ltd and JLR. The Tata Motors subsidiary also exports cars to China. The Changshu plant has an annual production capacity of about 200,000 units per year and produces models such as Range Rover Evoque, Land Rover Discovery Sport, Jaguar XFL and XEL variants and also the E-Pace model.
Outside of China, JLR is also planning to gradually resume production from 18 May, 2020 starting with its Solihull (UK) plant and other facilities in Slovakia and Austria.