Diesel tax hikes also contribute to the slow down.
The controversy over everything Brexit isn’t going away anytime soon. Corporations, in this case automakers, are rightfully concerned about what’s going to happen. Jaguar Land Rover is one of them. Reuters is reporting that JLR is planning to reduce production at its Halewood, England production plant later this year due to weakening demand because of Brexit and tax increases on diesel-engined cars. The automaker’s European and British sales were flat last year and the situation is expected to continue.
One of the last things any automaker wants is to have excess product when not enough buyers exist. The Halewood facility, one of three JLR plants in the UK, builds Range Rovers. JLR claims buyers are concerned about Brexit as well, and the associated diesel tax hikes aren’t helping things either. That alone is causing Britain to increase the amount of vehicle excise duty paid by anyone buying a new diesel vehicle beginning this April. That tax will hit JLR pretty hard considering some 90 percent of its sales consist of oil burners. At a national level, British new car registrations were at its lowest last year since 2009 – a direct result of the diesel tax and Britain’s upcoming departure from the EU.
There’s no word yet whether or not JLR will be forced to lay off certain employees, but this pre-planned slowdown will hopefully help get some of the economics under control. Other automakers with production facilities in Britain are feeling the heat as well, such as Bentley. But unlike JLR, Bentley’s parent company is VW Group, who could, if absolutely necessary, one day transfer production out of the UK entirely to an EU zone. JLR, however, is owned by Indian automaker Tata Motors, so it’s not at all likely the automaker will skip town. It’ll just need to find ways to weather the storm from the home front.