Jaguar Land Rover will cut a further 5,000 jobs. The British manufacturer of luxury cars is citing a number of reasons. Brexit, which hasn’t technically happened (and never will), mounting trade tensions between China and the U.S. but more specifically of all, low demand. JLR’s real plan is actually to implement cost-cutting measures. The trade tensions, Brexit, low demand is a convenient cover for what is a move to predominately foreign-based manufacturing.

The problem of real concern is the performance of Jaguar Land Rover’s owner. Tata Motors. Market intelligence specialists S&P Global Ratings recently classified Tata Motors long-term performance as junk status. If Tata Motors struggles then Jaguar Land Rover isn’t necessarily affected. As long as JLR is performing well. Indeed JLR’s profitability in recent years has spared the blushes of Tata Motors. However, if both companies are struggling at the same time then it is a real problem. Tata Motors will initiate a recovery plan. The first step is to make savings of around $1.8 billion within 18 months. The first step is already in motion, the 5,000 job cuts. It is very likely that further job cuts will be announced. In addition, Tata Motors will close uncompetitive plants and move some production abroad. This is the holy grail for JLR. Tata Motors will also invest a further $4 billion into future vehicle development. A slight reduction of the planned $4.5 billion. Industry analysts speculate that Jaguar Land Rover is trying and failing to take on rival German brands. There are many factors to slowing demand for JLR products. Some cite the UK government’s shift on diesel car policy. Others cite Brexit. JLR’s problem has and always will be consumer demand. Whatever the market conditions.  

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