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Jaguar Land Rover's China problems stem from lax quality control

Auto News - Published on Tue, 19 Feb 2019

Image Source: Diginomica
Automotive News reported that Jaguar Land Rover blames its latest quarterly loss largely on challenging market conditions in China. These include a rare decline in industry wide sales and the trade dispute between China and the United States. But those challenges are only part of the problem facing the company. What has rattled JLR's business in China most are persistent woes with reliability and dependability. JLR has never shipped vehicles from the US to China. It is a stretch to say the trade tensions between the two countries have exerted any significant impact on local sales. Weak product quality has long been a problem with JLR, dating to the time when the UK luxury automaker was still in the hands of Ford.

In 2014, JLR started production at a joint venture with Chery Automobile in the east China city of Changshu. From 2015 to 2017, five locally assembled products, the Land Rover Evoque and Discovery, and the Jaguar XFL, XEL and E-Pace, were launched. Local production allowed JLR to modify vehicle interiors and exteriors to local tastes. It also enabled buyers to avoid paying the 25 percent tariff that Chinese customs levied on imported vehicles back then. As a result, JLR's China sales surged to 146,399 in 2017 from 92,474 in 2015.

Yet, because product quality was never effectively addressed, the number of defects reported by owners increased in tandem. In 2017 alone, JLR carried out 13 recalls in China for defects with components ranging from engines, instrument panels and airbags to batteries. The recalls covered some 106,000 vehicles, which was equivalent to more than 70 percent of its local sales during the year. Since August, Jaguar and Land Rover owners have regularly protested in front of JLR's China headquarters in Shanghai to bring attention to widespread quality problems they allege with their cars and SUVs.

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Posted By : Joykumar Irom on Tue, 19 Feb 2019
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