Jaguar Land Rover has initiated a plan called Leap 4.5 which will oversee every aspect of the business and scrutinize the spending of the company, trying to save the costs.
The plan took shape because of the rising emissions cost and the slowdown in sales in China. British luxury car manufacturer spared the £3bn annual capital budget it sets aside for R&D and new plants. JLR’s China sales for the July to September period dropped 32% to 20,149 cars, against a wider market fall of 1.9% due to the economic slowdown, stock market declines and a currency devaluation, among others. The explosions that ripped through China’s Tianjin port damaged a staggering 5,800 Jaguar Land Rover vehicles parked in the vicinity, contributing to the loss.
The company is also suffering amid tightening emission norms in the United Kingdom where it has been asked to either meet the targets or pay fines, adding to the costs. The company has started using aluminium for manufacturing cars, including the new engine range called ‘Ingenium’ in a bid to save weight and attempt to meet the stiff norms.
JLR witnessed a change of fortune when it was brought by Indian conglomerate Tata in 2008. The company has 37,000 people on the roster and makes about half a million luxury cars a year. The marque British brand made a total profit of 2.6-billion pounds last year.
JLR wants to add over 50 new or updated products over the next five years and plans to open a new plant in Slovakia as part of an attempt by chief executive Ralf Speth. The company is in persuit of German carmakers like Audi Mercedes Benz and world’s largest luxury car maker, BMW. Audi, BMW and Mercedes-Benz collectively control about 80% of that market.
The slowdown in China is of grave concern as a quarter of total sale comes from China. However, on the basis of success the Evoque has seen, it is expected that Jaguar F-Pace, an SUV will help stem the growth and bring it back on track in China. The company did not comment about laying off staff but has put a freeze on hiring.