Coronavirus could put brakes on JLR production within three weeks

Sir Ralf Speth

Luxury car maker Jaguar Land Rover (JLR) said it could start to run out of Chinese-made car parts after two weeks.

The group, which directly employs 4,500 staff at its Halewood plant on Merseyside, revealed that it has been forced to fly in vital components in suitcases from China due to the impact of the coronavirus on its supply chain.

Bosses also confirmed that sales of JR’s vehicles across China have “completely stopped” due to nationwide health restrictions.

China’s factories remained shut after the traditional New Year celebrations in January as authorities forbade movement in cities to try and contain outbreaks of the deadly strain.

Almost 2,000 people in China have died from coronavirus.

Here in the UK fears were raised almost two weeks ago over the potential impact on worldwide production due to the prolonged shutdown of factories across China.

Now, JLR chief executive Sir Ralf Speth has confirmed that the car maker is starting to feel the effects of the interruption in supplies.

Speaking at an event in Coventry yesterday (February 18), the BBC quoted him as saying: “We are safe for this week and we are safe for next week and in the third week we have … parts missing.”

He revealed: “We have flown parts in suitcases from China to the UK.”

Guenter Butschek, the head of Tata Motors which owns JLR, said: “We are safe for the month of February and for a good part of March.

“Are we fully covered at this point of time for the full month of March?

“Unfortunately … not.”

JLR produces nearly 400,000 vehicles a year at its three factories in Halewood, and Castle Bromwich and Solihull in the West Midlands, where it employs the lion’s share of its 40,000 UK staff.

A JLR company statement said its direct supply chain is “primarily European and in the UK, with a small percentage in China”.

It added: “The coronavirus may impact us in the medium term, we are working with our suppliers to minimise any potential impact.”

However, with travel and movement severely restricted in China while authorities battle to control the spread of the virus, JLR’s sales have also been badly hit.

Sir Ralf confirmed activity in its showrooms has “completely stopped”.

He admitted: “It’s zero. You don’t know whether the economy will catch up or whether this kind of loss is just a loss.”

JLR announced plans last month to axe 10% of its Halewood workforce in a switch from three shifts to two.

It is also facing potential production problems after thousands of DHL logistics workers in the car maker’s warehouse operations began balloting on strike action earlier this month over a pay dispute.

In contrast, Isle of Man-based Strix Group, which makes controls for electric kettles, said its Chinese manufacturing operations are relatively unaffected.

In an update to the stock exchange today (February 19), it said its facilities in Guangzhou “have experienced mimimal impact to date”.

Two-thirds of its workforce have returned to the facility, which is sufficient to fulfil customer commitments for February.

It said: “The company is now focused on securing March and April to minimise any disruption.”