The Merseyside based carmaker, Jaguar Land Rover (JLR) could pay a heavy price for deteriorating relations between the China and the UK, with Chinese state media reporting that escalating tensions between the two nations over the recent ban on tech giant, Huawei building the UK’s 5G networks as well as the suspension of the extradition agreement with Hong Kong, could have serious consequences for British firms.
An article in the Global Times, seen by many as an ambassador for the Chinese Communist Party, mentioned specifically JLR and HSBC. It warned that if the UK, “upholds such a hostile attitude toward China, Beijing may have no other choice but to strike at British companies”.
JLR is already under great pressure due to the coronavirus crisis and any further disruption or boycott in its key Chinese market, would certainly deepen concerns for the business, which in June reported a pre-tax loss of £422m from revenues of £23bn.
It is particularly worrying for JLR’s factory at Halewood in Speke, as both its Ranger Rover Evoque and Land Rover Discovery Sport, are produced at the plant and both models have become a hit with Chinese consumers.
JLR is, in reality, owned by Indian industrial giant, Tata but is headquartered in the UK and is very much seen by China as a British concern. The government in Beijing has already warned the UK about taking what it described as an, “erroneous path”.
The Chinese central committee are also angered at the spotlight on its treatment of its Falun Gong community with reports of illegal organ harvesting, and of its Uighur Muslims, with widespread concerns regarding people being forcibly transported to work camps.
The company currently employs around 4,000 people at Halewood, which resumed production in June following the COVID-19 lockdown. JLR is already planning to cut both permanent and agency staff from its sites across the UK in the upcoming months.
The coronavirus pandemic, and ensuing shutdowns in many countries, couldn’t have come at a worse time for the carmaker which, after a turbulent few years, had seen a return to profits in its second and third quarters, with double-digit sales growth in China stemming from the popularity of its Discovery Sport and Evoque models. Evoque sales alone soared to almost 25% year-on-year and the company had high hopes for the, “refreshed”, Discovery Sport following its launch in March in China.
Did you find this article interesting? You may also like this: