Jaguar axes X-Type

JAGUAR Land Rover has revealed it will stop production of its smallest model, the retro-styled X-Type compact sedan, at the end of this year as part of a range of measures to cut costs after a 28 per cent sales decline in the past 10 months.

The X-Type was launched in Australia in September 2001 and was to have been built until at least mid-2010, but production will now not continue beyond 2009.

The move will cost 300 jobs at the Halewood plant in Merseyside via voluntary redundancies, while the plant is also expected to shut down for an additional three weeks from September due to slow sales.

“Our industry has been especially badly hit by the recession, and the premium sector more than others,” Autocar quotes JLR CEO David Smith as saying. “Jaguar Land Rover's retail sales have fallen by 28 per cent in the past 10 months.

“We have taken unprecedented actions to cut costs, including reduced production volumes, significant cuts to investment plans and some 2200 job losses. Ceasing production of the X-Type early, with further redundancies and temporary shutdowns at Halewood, is necessary to protect our other investment plans.

“Further actions will be determined by the state of the market and the speed with which the already-approved 340 million euro ($A598 million) European Investment Bank loan can be drawn,” said Mr Smith.

Jaguar has sold more than 350,000 X-Types globally over the past eight years, with Australian X-Type sales increasing by 5.6 per cent in the first half of this year, when 170 were sold.

According to Autocar, Jaguar has been in talks with the British government to provide a guarantee for the bank loan since January. Along with a £27 million ($A55.4 million) UK government loan, part of the EIB loan has been ear-marked for development of Land Rover’s new LRX compact SUV at Halewood.

Land Rover was expected to decide the future of the project in the final quarter of this year, but Autocar says delays in approving the loan guarantees could put the sub-Freelander model in jeopardy.