Jaguar Land Rover Faces Profit Plunge Amid Aluminium Crisis
- Jaguar Land Rover experienced a 10% decrease in profits due to a shortage of aluminium affecting production.
- This quarter's pre-tax profit was reported at £398 million, with revenues declining to £6.5 billion.
- The company remains hopeful for recovery in production and sales in the forthcoming months.
Jaguar Land Rover (JLR) has faced significant production challenges stemming from a shortage of aluminium, crucial for its luxury car manufacturing. This issue has resulted in a 10% decline in profits over the last quarter, reporting a pre-tax profit of £398 million. The disruption is attributed to supply chain issues faced by its unnamed key aluminium supplier, worsened by heavy rainfall and flooding across Europe this past summer. Alongside this, over 6,000 vehicles are pending due to required quality control checks. Despite these difficulties, JLR's chief executive, Adrian Mardell, praised staff for their proactive approach in mitigating the impact, allowing the company to fulfill as many client orders as possible. In terms of revenue, JLR reported £6.5 billion for the latest quarter, which is a 6% reduction compared to the previous year. Nonetheless, there is optimism for improvement as the company anticipates a rebound in production and wholesale volumes in the upcoming months. In a more extended view, JLR's financial performance over the first half of the fiscal year has shown resilience, with profits increasing by a quarter year-on-year to £1.1 billion. Additionally, the company has achieved remarkable order numbers, particularly with the new Land Rover Defender Octa model. JLR is also making substantial investments of £500 million into electric vehicle production, signaling a strategic shift towards future mobility solutions. Overall, while the aluminium shortage has temporary adverse effects on earnings, the company's strong historical profits and ongoing investments indicate a positive trajectory for JLR in the long term.