Jaguar Land Rover is reportedly set to axe 5,000 jobs in a cost-cutting exercise after seeing a slump in Chinese demand for its vehicles coupled with a fall in diesel sales.
The mass redundancies would help the company free up £2.5bn in cash flow, a transformation programme it announced in October.
Read more: China sales halve at JLR
The job cuts will be “substantial” and run into the thousands, an anonymous source told Reuters.
The British car manufacturer is expected to make the announcement today, according to the BBC, after the financial Times first reported the news in mid-December.
China had been one of JLR’s biggest markets but sales fell by almost half in September, leading to the manufacturer closing its Solihull production plant for two weeks to account for subdued demand.
JLR blamed trade war tensions and the resulting tariffs for the dampened appetite in Asia.
But recent industry figures also showed that UK car sales fell for the second year running in 2018, with dealerships selling 2.37m cars - down 6.8 per cent on 2017’s numbers.
"A second year of substantial decline is a major concern, as falling consumer confidence, confusing fiscal and policy messages and shortages due to regulatory changes have combined to create a highly turbulent market," said Mike Hawes, chief executive of The Society of Motor Manufacturers and Traders.
Diesel demand fell amid the fallout from the Volkswagen emissions scandal, with sales down by a huge 30 per cent.
JLR is directly affected by this, with 90 per cent of its vehicles running on diesel.