Jaguar Land Rover will cut around 4000 jobs worldwide over the next two years, making it the latest established car manufacturer to embark on a major downsizing program as the global automotive industry confronts weaker demand, rising costs and growing Chinese competition.

The British manufacturer, owned by India’s Tata Motors, confirmed the cuts as part of plans to strip £1.7 billion ($A3.5 billion) from its cost base and lower the number of vehicles it needs to sell to break even. Most of the affected positions are expected to be salaried and management roles in the UK rather than factory-floor jobs.

JLR employs about 34,000 people in Britain and approximately 43,000 globally. A voluntary redundancy program has been opened, although compulsory job losses could follow if insufficient employees accept the offer.

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Chief executive PB Balaji said JLR wants to lower its annual break-even volume from about 380,000 vehicles towards 300,000, allowing it to remain profitable at substantially lower production levels.

The cuts come after a difficult period for JLR. Revenue dropped almost 10 per cent in the April-June quarter compared with a year earlier, while the company has also been dealing with US import tariffs, weaker Chinese demand and the lingering financial impact of last year’s cyberattack, which halted production for several weeks.

North America remains particularly important to JLR, which previously identified the region as its biggest market and an important source of future growth. Its lack of US manufacturing makes it more exposed to tariffs than some rivals.

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Despite the cost cutting, JLR plans to invest between £15 billion and £18 billion ($A31-37bn) during the next five years in electrification, digital technology and advanced manufacturing. Five new products are also planned over the next 12 months.

JLR is far from alone. Volkswagen is undertaking its own sweeping restructuring and workforce reduction as Europe’s traditional manufacturers respond to high costs, slower-than-anticipated EV demand and increasingly formidable competition from Chinese brands.

For JLR, the challenge is particularly acute as it simultaneously prepares an electric-led reinvention of Jaguar while funding new-generation Range Rover, Defender and Discovery products.