Jaguar Land Rover’s annual profits have slumped by more than 99% as it counted the cost of US tariffs and a cyber-attack that disrupted its factories for months.
Britain’s largest carmaker made only £14m in profit before tax and exceptional items in the year to March, down from £2.5bn the year before, according to financial results published on Thursday.
The manufacturer, which employs 33,000 people in the UK, suffered a series of blows as Donald Trump’s automotive industry tariffs caused turmoil in its important export market.
That was followed by a damaging cyber-attack on the last day of August that forced the company to shut down most of its systems and factories for weeks, with disruption rippling on through the autumn.
The tariffs, which Trump raised to 25% before agreeing a deal for 10% for the UK, hit US demand for JLR’s luxury cars, before supply of products was halted by the attack. As a result, revenues fell to £22.9bn, down by more than a fifth compared with the previous 12 months.
JLR also said sales were hit by competition in China, where a huge number of carmakers are introducing new products.
JLR was not alone in struggling with tough conditions within the automotive industry. The Japanese manufacturer Honda on Thursday reported its first annual loss in 70 years as a listed company.
Honda was forced to write off 1.6tn yen (£7.4bn) in investments in electric cars after Trump removed subsidies for battery vehicles, pushing it to a loss of 423bn yen.
PB Balaji, who took over as chief executive of JLR only a few weeks after the hack, said: “JLR faced a challenging year with revenue and profit affected by multiple headwinds, including a pause in production following the cyber incident.”
However, he said the company “ended well” and had “come back resiliently”.
He added that in the second half of this year the company would launch the delayed Range Rover Electric, as well as showing the first smaller electric SUVs and its new Jaguar EV, called the Type 01. The electric Range Rover had initially been planned for 2025, but was postponed amid weaker-than-expected demand for battery cars.
Balaji declined to comment on Britain’s political turmoil, but he said it was crucial that the government reached an agreement with the EU to include UK carmakers in any new rules on “Made in Europe”. The rules, mainly designed to protect European industry from Chinese competition, could lock British carmakers out of EU incentives for EVs, putting them at a big post-Brexit disadvantage relative to factories in the bloc.
“The challenges would be significant for the UK as well as EU [manufacturers] if we do not come up with a solution,” Balaji said.
JLR makes its Range Rover and forthcoming Jaguar models in Solihull in the West Midlands and also produces its smaller SUVs such as the Discovery Sport in Halewood, Merseyside. Those models would be affected by the proposals to limit company cars to those made in the EU.
The steep costs of the cyber-attack and investments in new models meant the carmaker burned through £2.2bn of cash for the full year. However, JLR said it remained “resilient and well placed to address the geopolitical, inflationary and regulatory challenges the industry faces”, with £6.9bn of available money it could draw on.
