Jaguar Land Rover said it would prioritize production of more-profitable vehicles and change some specifications in response to continuing shortages of automotive semiconductors, the company said in a recent call with investors.
JLR said it expected to make 50 percent fewer deliveries to dealers in July through September than initially forecast, Chief Financial Officer Adrian Mardell said on the call last week.
“We will be doing everything possible to mitigate the impact, including prioritizing the production of higher margin vehicles as well as making production specification changes where possible,” Mardell said.
The company had expected to sell 115,000 cars to dealers (known as wholesales) worldwide in the last quarter through June, but lost 30,000 units because of the chip crisis, he said. He said the impact would be greater in the third quarter, with the forecast for dealer wholesales revised downward to about 60,000 or 65,000 vehicles from 125,000.
The chip shortage, driven by factors such as a surge in consumer electronics, unexpectedly fast rebound from last year’s coronavirus shutdowns, and fires and weather events at chip foundries, has left automakers scrambling for solutions.
Many have cut production and others have also shifted available supply to higher-margin models, as JLR is doing.
Mardell said JLR would focus on building “the most valuable units” until chip supply increases. The automaker, which is owned by India’s Tata, is also testing chips from alternate suppliers, as well as changing specifications on some models. It is also building cars in advance to await retrospective chip fitment.
JLR told investors that it currently has its biggest-ever customer order bank, at just under 110,000 units. Of those, 29,059 are for the Land Rover Defender SUV, it said. Defender production has been halted in Slovakia due to the shortages, JLR said at the end of June.