Tata Motors-owned Jaguar Land Rover (JLR) is asking customers to wait for up to 12 months to take delivery of the vehicle as the backlog of orders for the two British brands has hit 100,000 units across the globe.
About 60 percent of the backlog originate from the UK and Europe, followed by China and the US, a senior Jaguar Land Rover (JLR) official informed. Shortage of semiconductors is one of the primary reasons behind the crunch in vehicle supplies. It has started hitting the production of JLR’s plug-in hybrid electric vehicles, too.
“We have a huge order demand at this point in time, with almost 100,000 customers waiting to drive our vehicles. More than 22,000 orders now are for the Defender family. We would expect those order books to normalise in six, nine or 12-months' time,” Adrian Mardell, chief financial officer, Jaguar Land Rover, told analysts after the Q4FY21 results.
Tata Motors claimed that ‘proactive management with suppliers and chip brokers’ has limited the impact of the semiconductor shortage through the March quarter. However, such shortages are expected to continue through the first half of the year before improving in the second half.
JLR lost about 7,000 units of production due to the shortage. To counter such issues, JLR has formed an executive team to iron out production-related hiccups and speed up vehicle supplies.
“We've introduced some agile specialists to our workforce. We’re rolling this out, particularly, within the engineering fraternity. We've already started with hundreds of teams and we will have thousands of people working there. Those teams are empowered to fix the problems over the next six to nine months. We expect to significantly speed up our time to market. We have committed to a 40 percent improvement,” Adrian added.
During the March quarter, JLR clocked retail sales of 123,483 units, which was 12 percent higher than the same quarter last year when the two brands sold 109,900 units. China, the second-biggest market for JLR globally, was up 127 percent during the quarter. For the full year FY21, however, volumes were down 14 percent to 439,600 units as against 508,700 units in FY20.
Thierry Bollore, CEO, Jaguar Land Rover, said: “You always learn from a crisis and find opportunities. From our Tier-2 and Tier-3 suppliers, we are learning about microprocessors and the way they work. We need a change in the way we are operating our supply chain with them. And it's exactly what we are preparing at the moment to have a structural fix to this problem”.