Jaguar Land Rover has launched a project that would cut costs of $6.8 billion and that would build 1 million cars every year through 2020, according to the British newspaper Sunday Times.
The secret project is named Leap 4.5 and will allow manufacturing more car models on similar core skeletons, analyzing and improving the luxury carmaker’s supply chains and reducing or even halting the recruitment process without any confirmed plans for redundancies.
According to people familiar with the topic, the project was created to lower the effects caused by poor sales in China and also by the costs imposed by meeting emissions standards. It will manage to reduce around $4.5 billion in capital dedicated on research and development and building new factories.
China is the British carmaker’s fastest growing market in 2014 but this year the world’s biggest auto market went down 32% in July to September due to an infamous economic slowdown, a massive fall in the stock market and currency devaluation, which have affected most carmakers out there.
Tata Motors, the owner of Jaguar Land Rover, could not be reached to comment on the information. The Indian parent company for Jaguar Land Rover witnessed a sharp decrease in its Chinese sales due to a conjunction of factors: a general market slowdown and the disastrous explosion on Tianjin port which destroyed a part of the company’s car stocks. Tata Motors announced earlier this year that the net loss in the third quarter amounted to $65 million, with Jaguar Land Rover by itself taking a $139 million blow, amounting to a 32% decrease in sales in China.