Order for China gains Jaguar breathing space

Feb 28 2009 by Iain Laing, The Journal

CAR group Jaguar Land Rover has signed a “very significant” order to supply 13,000 vehicles to China in a rare piece of good news for the beleaguered motor industry.

The firm said it was pleased to confirm that a memorandum of understanding had been signed with one of its major business partners in China for the supply of the vehicles over a three-year period.

“This is a very significant order, it underlines the importance of the Chinese market and the commitment of our partner,” said a JLR spokesman.

“Sales of our vehicles in China have been growing rapidly over recent years and it is now already established as our fifth-largest market in the world.

“The confirmation provides us with a solid base on which to further build our presence in this key emerging market and is particularly welcomed at this challenging time for us and the automotive industry.”

Jaguar Land Rover employs 15,000 people in the UK at sites including Castle Bromwich and Solihull in the West Midlands and Halewood on Merseyside.

The order, for both Land Rover and Jaguar cars, comes as many carmakers have cut jobs after falling sales. Jaguar has asked workers to take a one-year pay freeze and four-day week. Staff will vote on the move next week, which would guarantee no compulsory job cuts.

China was the company’s fifth-largest market. Last year, it sold 2,000 Jaguars and 11,000 Land Rovers there. Car sales in China have fallen but the slump has been less severe than in the UK and US.

Last December, China leapfrogged the US to become the world’s largest car market, after figures showed there were more cars sold in China than the US that month.

Unite national officer Dave Osborne said: “This order will clearly allow JLR to breathe slightly more easily for the moment, and is testimony to both the skills of the workforce and the strength of the brand globally. But we are under no illusions. This order may help keep the wolf at a further distance from the door, but it is still lurking.

“JLR, in keeping with every single car producer in the UK, is in clear need of urgent financial support from the Government, including crucial help to aid short-time working.

“Only then will we stand a fighting chance of keeping our world-class companies like JLR intact.”

Meanwhile, Rolls Royce has signed an £841m agreement to supply airline engines to China’s Hainan Airlines. The company, which employs 400 staff at its Washington aircraft part factory, will make engines for 20 Airbus A330 aircraft and service the equipment.

This month, Rolls Royce posted a 10% rise in underlying pre-tax profits to £880m for 2008, at the top end of market expectations and said its order book had grown 21% to £55.5bn.

This … is testimony to both the skills of the workforce and the strength of the brand globally