Jaguar Land Rover overhauls supply chain to avoid plant closure

Jaguar Land Rover overhauls supply chain to avoid plant closure


Jaguar Land Rover will completely rectify the supply chain and negotiate directly with chip manufacturers in an attempt to avoid a repeat of the factory shutdown caused by the semiconductor crisis that plagued the business this year.

Thierry BollorThe CEO said that the automaker will more strictly control mission-critical components such as microprocessors and batteries because it requires more work, such as internal electric drive units.

For a long time, automakers have outsourced most of their vehicles to suppliers and have been re-planning their supply networks since last year. Chip shortage crisis The industry lost millions of car sales.

“This is a real storm, I really don’t believe it will improve in a few months, I believe it may last longer,” Bolloré told the Financial Times.

The former Renault boss also said in a newspaper interview for the first time since joining the automaker in September that Jaguar Land Rover is about to announce plans to purchase electric car batteries from the UK.

Bolloré is responsible for reversing the situation of the legendary British car manufacturer, which was surpassed by Nissan last year to become the country’s largest manufacturer and has serious problems with overlapping technologies and product ranges.

A strategic reform announced in March will involve rebranding the troubled Jaguar brand into a pure electric luxury competitor from 2025, and the company will abandon traditional engines in the middle of the next decade.

Bolloré told the Financial Times at the company’s new headquarters office in Gaydon, Warwickshire, that the auto industry discovered the risk of shortages of chips and other components needed to make modern technology vehicles “late”.

“The way to deal with the problem [shortages] And having control is something we are late to take action,” he said.

In the future, Jaguar Land Rover will deal directly with its own chip suppliers.

Part of the problem with current shortages that have caused automakers from Volkswagen to General Motors to Toyota to close factories for weeks is the visibility of the supply chain.

“We need to work with [chip suppliers], Not only through our first and second floors [suppliers], We also need to work directly with them,” Bolloré said.

It will introduce electric drive units internally and plan to make the business of key components more “vertically integrated”.

The company is still “exploring all possibilities” and deciding whether to manufacture or buy batteries for its electric car kits. This field will be as important as today’s engine manufacturing in the future.

Thierry Bolloré says that the automotive industry finds the risk of a chip shortage “it’s too late” © Andrew Fox/FT

Bolloré stated that sourcing from the UK plant is “our favorite option,” adding that the company has determined the chemical composition of its battery technology and is in final discussions with a few battery manufacturers on plant location. He said that a final decision is expected within a few months.

The Financial Times reported last week that six battery investors are working with British GigafactoryIncluding Samsung and LG, there were several postponement decisions before JLR announced its plans.

The company’s current and former executives said that since Bolloré took office in September, the company’s morale has skyrocketed. This was under the ten-year tenure of former boss Sir Ralf Speth. After the hard last few years.

A person familiar with the matter said that Bollore’s new strategy was welcomed internally, and the option to reduce production was seen as a “low-hanging fruit.” But hard choices still exist.

Speth’s cost-cutting plan cut 5,000 jobs, which to some extent alleviated the overspending problem that has plagued the company for many years.

But Polloré-the long-time deputy of former Renault boss Carlos Ghosn, known as a “cost killer” because of his savings drive-said it is possible for the entire company to save “more” in the future.

He said his new plan broke Jaguar Land Rover’s previous sales target of 1 million vehicles and focused on “value rather than quantity.” Last year, the group produced only 425,000 cars.

He said this includes stopping car manufacturing at his Castle Bromwich plant in the West Midlands, and may further reduce other plants based on the size of the luxury car market in the next few years.

When asked if the changes in other factories will be followed up in time, Bolloré replied, “Oh, yes.”

As part of more modest ambitions, Jaguar Land Rover also has no plans to advance any expansion of its Slovak factory that opened in 2018. The Slovak government has designated a site next to the current factory for the automotive group and is expected to be developed.

Bolloré said the company currently has no plans to manufacture electric models at the production site of the Land Rover Defender and Discovery.

He added that Jaguar, which has been behind rivals BMW and Mercedes for many years, will enter the high-end market with a greatly improved model lineup.

He said that the Jaguar I-Pace is Jaguar’s only pure electric model that has won global awards. It will not become part of Jaguar’s final family, but will continue for several years, including the launch of new derivative models.

Under Speth’s leadership, the group began to explore the use of hydrogen in its larger models, which were difficult to convert to battery models due to weight.

Bolloré said that this option “may make sense” once the hydrogen production efficiency increases, but “it makes no sense to use very expensive and not very clean hydrogen today.”

However, Bolloré promised to introduce battery-electric versions of Range Rover and Defender. “Our business is completely related to batteries.”

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