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LONDON (Reuters) - Britain's biggest carmaker Jaguar Land Rover TAMO.NS said it will cut 1,000 jobs and reduce production at two of its English factories as demand for diesel cars slumps in the face of higher taxes and a regulatory crackdown.

The company, which builds nearly one in three of Britain’s 1.7 million cars, will lay off some of its agency workers at its central English Solihull site and move just over 360 people to the location from its nearby Castle Bromwich plant.

“We are not renewing the contracts of 1,000 agency workers at Solihull,” a spokesman told Reuters.

Jaguar sales are down 26 percent so far this year whilst Land Rover demand dropped 20 percent in its home market as buyers shun diesel.

About 90 percent of Jaguar Land Rover’s (JLR) sales in Britain are diesel models, which compares with around 45 percent globally.