Jaguar may announce as early as this week the extent of production cuts that the Ford luxury brand plans for this year amid slack demand, a spokesman told Reuters on Friday. But any broader decision on reducing manufacturing capacity at Jaguar’s three British plants is still weeks away, spokesman Don Hume reportedly said.
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“We are just working out the details now on the volume (of the reduction in output in 2004) and how we will implement it, but it will happen,” Hume told the news agency. “What we may have next week is more detail on exactly what we do with production cuts … The real longer-term plan will be a few weeks yet at least,” he added.
Ford president Nick Scheele told Reuters on Thursday that no firm decision had been made about slashing the output of British-built Jaguars, which are part of Ford’s stable of luxury brands known as the Premier Automotive Group (PAG).
He reportedly said Jaguar managers had held talks with union officials about the automaker’s inventories, production and sales.
“Certainly for the number of cars sold, we have too much capacity,” Scheele said, according to Reuters.
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By GlobalDataThe report said Jaguar’s US sales plunged nearly 25% in July and are down about 7% so far this year.
Its disappointing performance is weighing on overall results at PAG, which also includes the Land Rover, Aston Martin and Volvo brands. Ford chief financial officer Don Leclair said last month that the parent company was working to turn Jaguar around, Reuters noted.
Scheele indicated to the news agency that a broad restructuring may be needed to get Jaguar back to sustained profitability. “You have to look at fixed costs,” he said.
Reuters noted that Ford’s luxury car business is key to its goal of booking $US7 billion in annual pretax profits by 2006. PAG and Ford’s Lincoln brand are supposed to account for a third of that profit.
But PAG swung to a pretax loss of $362 million in the second quarter from profit of $166 million a year earlier, hit by the strong euro, model changeovers and higher operating costs, the report added.
