Truth be told, it had no choice.
Jaguar Land Rover's return from the brink has been impressive. Exactly three years ago, it posted a devastating $118 million loss. Jobs were immediately cut, certain models were dropped, and a general operational overhaul was required. The painful work eventually paid off. Things were looking much better and then the world was struck by the pandemic followed by the semiconductor chip shortage. Now, JLR could potentially lose the financial gains it achieved over the past year because of an inability to build and deliver vehicles, like the in-demand Land Rover Defender and Range Rover Evoque. Something has to be done.
The company's chief financial officer, Adrian Mardell, has confirmed to Automotive News Europe production emphasis will be placed only on its "most valuable units."
More profitable models are now a priority until chip supplies return at normal rates. That's not expected to happen until the middle of next year, at the earliest. The Defender is definitely the priority, but a complete list is not yet available. "We will be doing everything possible to mitigate the impact, including prioritizing the production of higher-margin vehicles as well as making production specification changes where possible," Mardell said.
The latter part of that sentence clearly indicates JLR will also eliminate some vehicle features that require those chips, such as wireless charging and start/stop systems. General Motors, Ford, and others are already doing this for the same reason.
JLR's usual chip suppliers are based in Japan but it's now studying the possibility of purchasing chips from alternate suppliers. Other JLR models will continue to be built but won't be shipped to dealerships until they're retrofitted with chips at a later date. But there is some good news to report. Mardell made clear the chip crisis will not have an impact on the all-new Range Rover, due in 2022.
However, JLR has not determined the number of new Range Rovers it'll build next year until it gets a clearer outlook on when chip supplies will resume at more steady rates.