Jaguar Land Rover to halt production at 2 plants due to chip shortage

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Prominent British luxury automaker Jaguar Land Rover (JLR) is reportedly halting production at its two major car manufacturing plants temporarily on account of the shortage of computer chips.

The Tata-owned company mentioned that it has adjusted the production schedules for some vehicles implying that its Halewood and Castle Bromwich manufacturing plants will observe a limited period of non-production starting from Monday (26th April). The company is working closely with the affected suppliers for resolving the issues and reducing the impact on customer orders wherever possible. Production at its third plant based in Solihull will continue, JLR added.

Reportedly, the Castle Bromwich factory manufactures the models including Jaguar XE, XF and F and has 1,900 workers, whereas Halewood produces the Range Rover, the Land Rover Discovery Sport and Evoque and employs nearly 4,000 workers. 

The Covid-19 pandemic seemed to have elevated the demand for semiconductor chips to be used in electronics including computers as large number of people are working from home. As a result, the suppliers are struggling to make adjustments.

Apparently, all the modern cars are reliant on complex electronics, that are used in various systems such as engine management, entertainment gadgets, driver aids, parking cameras, etc. These cars reportedly require semiconductors. As of now, the entire consumer electronics sector seems to be struggling to meet the increasing demand.

According to the sources of knowledge, the reason for auto industry being vulnerable is its dependence on the just-in-time delivery, wherein the parts are fetched according to the requirement instead of being stocked.

France's renowned automaker Renault recently warned that the chip shortage was getting worse. Meanwhile, Stellantis, that owns the UK Vauxhall brand stated that it is planning to replace digital speedometers with the conventional analogue ones in one of the company’s Peugeot models.

Automotive giants like General Motors, Volkswagen and Daimler have also suspended their production lines at several times in recent weeks.

Source credits: https://www.bbc.co.uk/news/business-56841946