Jaguar Land Rover to cut output due to Brexit, diesel uncertainty to hit sales

The name badge is seen on Jaguar Land Rover's I-PACE concept car on display ahead of it's 2018 production launch as Jaguar's first fully electric SUV at their 'Tech Fest' in London, September 7, 2017. REUTERS/Toby Melville

LONDON (Reuters) - Britain's biggest carmaker Jaguar Land Rover TAMO.NS will temporarily reduce production at its northern English car plant in Halewood later this year in response to weakening demand due to Brexit and tax hikes on diesel cars.

Jaguar Land Rover’s sales in Britain and Europe were flat in 2017 and it expects tough conditions to continue, the company’s sales director said earlier this month.

The Halewood plant, which builds Range Rover models, is one of the Indian-owned automaker’s three production sites in Britain, which together build nearly one in three of the country’s roughly 1.7 million cars.

“Ongoing uncertainty surrounding Brexit is being felt by customers at home and in Europe,” the company said on Monday.

“Concern around the future of petrol and diesel engines – and general global economic and political uncertainty – and it’s clear to see why the industry is seeing an impact on car sales.”

“Following a review of planned volumes, we are planning to make some temporary adjustments to the production schedule at Halewood in Q2.”

Britain will increase the amount of vehicle excise duty paid by almost everyone buying a new diesel car from April, which will likely hit Jaguar Land Rover, for whom diesel accounts for around 90 percent of sales.

British new car registrations last year across the sector recorded their biggest drop since 2009, with an industry body blaming the diesel levy and weakening consumer confidence in the wake of Britain’s vote to leave the European Union.

Reporting by Costas Pitas