Jaguar Land Rover Profit Plunges 69% Due to Supplier Fire and Middle East Conflict

Revenue at Jaguar Land Rover fell nearly 10%, while profit dropped 69% in the latest quarter as Britain’s largest automaker once again faced production disruptions. The company was forced to temporarily halt production at its Solihull plant in late March because of a fire at a supplier’s facility in Norway, while market disruptions related to the conflict in the Middle East also affected sales volumes. A year earlier, JLR had already halted operations at all of its plants for five weeks because of a cyberattack, which nearly wiped out its annual profit.

Revenue for the three months ended in June was £5.97 billion (about $8.03 billion), while pretax profit was £109 million (about $146.7 million). The company attributed the decline in profitability to higher marketing expenses without providing further details. Operating margin was 2.8%, down from 4.0% a year earlier, comparable with the figures reported by Audi, BMW, and Mercedes-Benz.

JLR, owned by India’s Tata Motors, is also dealing with weaker demand in China and higher tariffs in the U.S., its largest market. Tata Group is also facing uncertainty over its capital investment plans following the resignation of board chairman Natarajan Chandrasekaran. JLR CEO P.B. Balaji is betting on growth in the U.S. and plans to launch hybrid versions of the Range Rover and Defender, while in May the company reached an agreement with Stellantis to develop vehicles in the U.S. According to Balaji, demand for the brands remains strong, with four new models expected to launch in the coming months.

The company is also continuing its electric vehicle development efforts. Electric versions of the Range Rover, Range Rover Sport, and Defender are in the works, as is the Jaguar Type 01 EV — the first model in a new all-electric lineup for a brand that has not produced vehicles for nearly two years.

Tata Motors reported lower-than-expected profit as weak results from its British subsidiary offset sales growth in India. Net profit fell 80% to 7.75 billion rupees (about $85 million). The company plans to increase its share of the Indian market from 14.2% to 20% by 2031 through new models, while JLR’s contribution to group revenue could reach $50 billion by then.