Jaguar Land Rover warns of 50% sales slump from chip crisis

Jaguar Land Rover warned a global semiconductor shortage is worsening and deliveries in the second quarter will be 50 percent worse than initially thought.

"The chip shortage is presently very dynamic and difficult to forecast," JLR said in a statement that was filed to Indian stock exchanges by parent Tata Motors on Tuesday.

"The broader underlying structural capacity issues will only be resolved as supplier investment in new capacities comes online over the next 12 to 18 months, and so we expect some level of shortages will continue through to the end of the year and beyond."

JLR joins SAIC Motor, China's biggest automaker, in cutting vehicle output as a result of the automotive semiconductor shortages. SAIC trimmed its wholesale target by about 500,000 cars in the first half, Bloomberg News reported Monday.

Other automakers including Nissan, Hyundai and Volkswagen have warned that shrinking inventory due to the semiconductor dearth will keep squeezing sales this summer.

A shortage of automotive chips that began in December as consumer demand for personal devices soared amid pandemic lockdowns has persisted through 2021, with a factory fire at a major manufacturer in Japan and frigid weather in the U.S. exacerbating the crisis.

The shortages are threatening to slash $110 billion in sales from the car industry, consulting firm AlixPartners forecast in May, and has forced auto manufacturers to overhaul the way they get the electronic components that have become critical to contemporary vehicle design.