British carmaker Jaguar will cut production by some 15,000 units over the rest of 2004 amid slack demand, a Jaguar spokesman said on Friday.
“Jaguar is to reduce production volume at its three plants in the U.K. ... by a total of some 15,000 units through the remainder of 2004,” the spokesman said but would not say to what level the production would end up at.
Industry analysts said production would be cut to around 120,000 units.
“This is a prudent move that will enable us to bounce out our stocks, particularly in the U.S. market, where our performance has been adversely impacted by exchange rates and the increasingly competitive environment among luxury brands,” the spokesman said.
Jaguar is part of Ford Motor Co.’s stable of luxury brands known as the Premier Automotive Group (PAG).
It gave no news on reducing manufacturing capacity at Jaguar’s three British plants.
Ford President Nick Scheele told Reuters last week that no firm decision had been made about slashing the output at Jaguar, which he said had too much capacity for the number of cars sold.
Jaguar’s U.S. sales plunged nearly 25 percent in July and are down about 7 percent 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.
Ford’s luxury car business is key to its goal of booking $7 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 sunk into a pretax loss of $362 million in the second quarter from a profit of $166 million a year earlier, hit by the strong euro, model changeovers and higher operating costs.