Why Jaguar Land Rover Has Decided It Needs to Change

Jaguar Land Rover is cutting 4,000 jobs after a sharp deterioration across its main markets, a damaging cyberattack and the expensive task of reinventing the company for an electric future.

China has become the central problem. European carmakers once viewed the country’s expanding middle class as a seemingly limitless market for premium foreign brands. JLR and rivals including BMW, Audi and Mercedes-Benz moved aggressively to meet that demand while growth in Europe was difficult to find.

The market has changed dramatically. Chinese manufacturers, backed by their government’s drive to make the country a leader in electric vehicles, have improved their technology and shortened development times. A weaker Chinese economy, tougher competition and a new luxury-car tax have squeezed JLR’s margins and reduced its regional revenue.

JLR’s sales in China dropped from 146,000 vehicles in 2017 to 62,400 in the last financial year. It is not alone. Volkswagen has also suffered in China, a factor in its decision to eliminate 100,000 jobs by the end of the decade.

Chinese brands are now bringing that pressure into the UK and Europe. BYD and Chery have gained market share, while the Jaecoo 7 ranked as Britain’s third best-selling car during the first half of the year. Analysts say established brands face a difficult fight against companies that can sell more cheaply and develop vehicles faster.

The United States has also weakened for JLR. Sales fell from more than 120,000 vehicles in the year to March 2025 to just under 100,000 the following year. The cyberattack that paralyzed production worldwide in September 2025 disrupted output through the end of the year and cost the company £1.9 billion. US import tariffs and uncertainty over their level added further pressure.