JLR Production Normalised, Demand softness now key Risk: CFO

UK-based luxury carmaker Jaguar Land Rover has resolved its cyber and supply-chain constraints, and production has returned to normal levels, but softer global demand has now emerged as the bigger concern, a senior company executive said on Thursday.

Speaking during Tata Motors Passenger Vehicles Ltd’s Q3 FY26 earnings call, JLR Chief Financial Officer Richard Molyneux said the company’s key plants are operating at full capacity after recent disruptions. However, demand in major markets such as the United States and China remains subdued.

“Demand globally is not particularly strong,” Molyneux said. “China has some issues, and the US, with continued uncertainty, is also not as buoyant as it was before. The cost to acquire customers on a global basis is rising.”

He also acknowledged rising competition in Europe and the UK, including from Chinese automakers, but said JLR benefits from an open global trade environment. “We are generally in favour of a free trade world,” he said. “Competition tends to be good. An environment of global free trade is better for JLR than one of global protection.”

Molyneux said the recent trade agreements involving India and key global markets are positive for the company, though benefits may take time to materialise. “Free trade agreements between India and the countries in which we produce our cars are good news. But the phasing of those agreements can take quite some time,” he said.

Production Normalised

Molyneux said JLR’s production network is now normalised after the cyber incident that affected operations earlier in the year.

“In terms of our plants, there are no cyber constraints,” he said. “The plants that produce the vehicles that underpin our performance, namely Solihull, which produces Range Rover and Range Rover Sport, and Nitra, which produces Defender, are operating at full capacity.”

JLR currently produces vehicles in the UK, Slovakia and China, and has assembly units in India and Brazil.

According to Molyneux, no further exceptional costs related to the cyber incident are expected going forward. “We would not anticipate any exceptional items relating to the cyber incident to occur in Q4. That will only be Q2 and Q3,” Molyneux said.

The finance chief’s comments also indicated that supply-side disruptions that affected production and earnings in recent quarters have largely been resolved.

Q3 Performance

JLR’s financial performance in the December quarter reflected the impact of earlier disruptions and softer market conditions. Its revenue for the third quarter stood at £4.5 billion, down 39% year-on-year, while revenue for the year-to-date was £16.0 billion, down 24%.

The decline in top line was largely due to lower wholesale volumes following the cyber incident, with production only returning to normal levels by mid-November and additional time required to distribute vehicles globally.

Profitability was also affected by the planned wind-down of legacy Jaguar models ahead of the new Jaguar launch, continued weakness in China, incremental US tariffs and higher variable marketing expenditure.

Loss before tax and exceptional items stood at £310 million for the December quarter and £444 million year-to-date, compared with a profit of £523 million and £1.6 billion respectively a year earlier. The EBIT margin was negative 6.8% in the quarter, down from 9% a year earlier, and negative 2.9% year-to-date.

Exceptional items in the quarter totalled £74 million, including £64 million related to the cyber incident. Loss after tax for the quarter was £298 million, compared with a profit of £375 million a year earlier. Year-to-date loss after tax stood at £609 million, versus a profit of £1.2 billion in the same period last year.

Meanwhile, despite the near-term challenges, the company reaffirmed its medium-term investment and financial guidance. JLR plans to maintain investment spending of £18 billion over the five-year period from FY24.

For FY26, the company reiterated its guidance of an EBIT margin in the range of 0% to 2% and free cash outflow of £2.2 billion to £2.5 billion.