Jaguar Land Rover has paused production of its Defender 4X4 because of the worldwide shortage of semiconductor microchips.
Work has been stopped at its factory in Nitra, Slovakia, where it is scheduled to make 150,000 of the off-roaders a year.
Demand for the new Defender has been so high since it went on sale in 2019 that it is already subject to delivery waiting times of up to a year.
However, this period is set to extend further as workers down tools at it’s latest state-of-the-art production facility.
Shutdown: Work has been stopped at Jaguar Land Rover’s factory in Slovakia, where it makes 150,000 of the Defenders a year
Manufacturers in all industries have been affected by the shortage of semiconductor chips, which pre-dated the pandemic.
Outputs of new cars have been massively impacted, with the latest models becoming increasingly dependent on chips for everything from digital displays to engine management.
Car makers shut their plants during lockdowns, prompting chip makers to switch production to more profitable processors for consumer electronics.
When car factories reopened earlier than expected, there were far fewer chips available than needed.
It has been reported that nearly 100,000 customers are currently waiting for deliveries of Jaguar Land Rover products due to the supply shortage.
It means waiting times can range for between four months and almost a year for certain models.
Models with plug-in hybrid powertrain are said to have been impacted most by the semiconductor chip shortage.
The bulk of the backlog originates from mainland Europe and the domestic market, according to chief financial officer Adrian Mardell, who spoke about the maker’s chip woes in May.
‘It’s the result of the supply side,’ he said in a statement to investors regarding JLR’s quarterly earnings.
‘Expect those order books to normalize in six, nine- or 12-months’ time,’ he added.
Production is down 7,000 units in the first quarter of 2021 due to the chip supply issues – and more than 20,000 orders for the Defender are currently in place, Mrdell said.
JLR has already curbed production at its Halewood factory in the past few weeks due to the shortage, while other makers – including BMW, Daimler, Ford and General Motors – have also had to pause assembly lines due to supply issues.
Production has been put on hold at Jaguar Land Rover’s Nitra factory, which also produces the Discovery 4X4
The state-of-the-art Slovakian factory, which began production of vehicles in October 2018, has been forced to pause the Defender production line due to the semiconductor chip shortage
Jaguar Land Rover has already curbed production at its Halewood factory in the past few weeks due to the shortage (pictured, the Defender production line in Nitra, Slovakia)
Last week, the UK automotive trade body said car manufacturing would be recovering from the coronavirus pandemic much better if it were not for global supply shortages caused by the pandemic.
While production rose dramatically in May, according to the latest figures released by the Society of Motor Manufacturers and Traders (SMMT), the sector still faces ‘ongoing Covid-related issues’, it warned.
Some 54,962 cars rolled off production lines compared to just 5,314 a year ago, when coronavirus halted manufacturing.
Outputs, however, were still far below pre-pandemic levels, down 52.6 per cent on the same month in 2019 as the supply of semiconductor chips used in the latest models, which has brought assembly lines almost to a grinding halt.
The car manufacturing sector is desperate to bounce back from the impact of the pandemic over the last 16 months, which saw outputs fall by almost a third to less than 1 million vehicles in 2020 – the biggest year-on-year plunge since the financial crisis and the lowest total output since 1984.
Demand for the new Defender has been so high since it went on sale in 2019 that it is already subject to four- to five-month waiting times for deliveries
The pause in production means customer waiting times are set to extend further as workers down tools
Land Rover said in February last year that since the Defender was unveiled in September it had seen over 1.2 million customers globally express an interest in the 4X4
So far this year UK factories have turned out 429,826 cars, up some 105,063 units on last year, the majority (95.3 per cent) of the additional volume built for export, but overall output remains down 22.9 per cent on the same five-month period in 2019.
The SMMT said this is ‘reflective of the scale of the challenge facing the industry’ as it seeks to recover from the pandemic while grappling with global supply shortages, notably of semiconductors.
When compared with a five-year average, production was down a massive 58 per cent for May and more than a third (36.3 per cent) off the pace in the opening five months of the year.
Jaguar Land Rover spent €1.4bn (£1bn) on the Nitra factory, which opened less than three years ago
Last week, the SMMT said UK car manufacturing would be recovering from the coronavirus pandemic much better if it were not for global supply shortages caused by the pandemic
Global inflationary pressures affecting materials like copper, steel and oil are adding to the well reported issues surrounding semiconductor supply, which continue to hamper global automotive output, according to experts
Mike Hawes, SMMT Chief Executive, said: ‘The recovery of car production is still massively challenged here and abroad by global supply shortages, particularly semiconductors.
‘If the UK is to remain competitive, therefore, it must ensure it has a globally attractive policy framework for both vehicle production and the supply chain.’
Richard Peberdy, UK head of automotive at KPMG UK, explained the reason behind the supply shortage issues felt by auto makers.
‘Global inflationary pressures affecting materials like copper, steel and oil are adding to the well reported issues surrounding semiconductor supply, which continue to clip UK automotive output,’ he told This is Money.
‘And while the Covid-19 picture is improving, new outbreaks have forced some port shutdowns in China, creating new blockages in the global supply chain.
‘Inventories have fallen to very low levels as production remains stifled and demand recovers.’
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