1444 Thursday 10 January 2019
It’s been a tough week for the auto industry. It was announced yesterday that car sales in China fell for the first time in 20 years, and today, both Jaguar Land Rover and Ford are slashing thousands of jobs. 2018 saw a 6% drop in car sales in China with a total of 22.7 million vehicles being sold. The news comes off the back of a trade war narrative to close last year in which taxes on imported cars played its part. While $bn’s in tariffs were imposed by both counties, European carmakers including Mercedes and Fiat were also caught up in the crosshairs. The slump has prompted the China National Development and Reform Commission to introduce new policies to revive the consumer car market.
Today the loss of nearly 10,000 combined jobs was announced by carmakers Jaguar Land Rover and Ford. JLR cited a drop in demand for diesel cars as well as the aforementioned slump in Chinese sales for the 4500 jobs they intend to cut in the UK, a figure that represents over 10% of the workforce. The job cuts are in addition to the 1500 losses JLR announced last year. As well as having the same issues as JLR, Ford have also placed Brexit uncertainty as one of their reasons for cutting jobs. The exact figures for the jobs under fire has not yet been announced as they wait to see the outcome of Brexit, however German jobs are in more immediate danger.
All three of these issues have cited the rise of electric car’s as being a factor, so it’s no surprise to see Telsa stock up over 12% since the start of trading in January.
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