Jaguar warns on UK outlook

Jaguar warns on UK outlook

Jaguar Land Rover sales have risen 7% to a record 621,109 vehicles in 2017 but the UK’s biggest carmaker says it faces tough conditions in its home market due to weakening consumer confidence and a planned diesel tax rise on new cars, writes Costas Pitas.

The company has embarked on a major turnaround plan since being bought by India’s Tata group in 2008. This includes investment in new models and expansion of production with the aim of building around a million vehicles a year by the turn of the decade.

It said growth in China, its largest market, and in the US helped to offset difficult conditions in the UK and the rest of Europe, where demand was flat.

“We have once again delivered year-on-year sales increases thanks to a world-class product range and new models such as the E-PACE and Velar, as well as China-specific models such as the XFL,” group sales operations director Andy Goss said.

He added: “But we are facing tough times in key markets such as the UK where consumer confidence and diesel taxes will hit us.”

However, the company does expect domestic sales to rise this year from 2017’s 118,000 vehicles.

The UK’s car industry body said last week that 2017 sales recorded their biggest drop since 2009, blaming plans to increase a levy on new diesel cars and weakening consumer confidence in the wake of Brexit. Around 90% of Jaguar Land Rover sales in the UK are diesel models, which compares with around 45% globally.

The UK’s Chancellor of the Exchequer, Philip Hammond said in November the vehicle excise duty would rise from April for those buying almost any new diesel car, potentially costing hundreds of pounds more for top-end models.

“It’s difficult to fathom the latest decision in the budget,” Goss said.

Major carmakers are scrambling to meet tougher emissions targets and growing demand for cleaner technologies. Jaguar Land Rover said last year that all of its new cars would be available in an electric or hybrid version from 2020. Goss said the firm would decide this year whether to build electric models in the UK.

Peugeot-maker PSA will cut a further 250 jobs at its Vauxhall car plant in the north of England, reducing the workforce by a third as part of efforts to make the plant more efficient by reducing its output to one shift.

- Reuters

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