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Jaguar Land Rover’s quarterly profits nearly halved on higher costs triggered by the global trade war, underscoring the challenges confronting its new chief executive.
Pre-tax profit for the April to June quarter fell 49 per cent from a year earlier to £351mn, while its operating profit margin fell to 4 per cent from 8.9 per cent due to a £254mn hit from the 27.5 per cent tariff imposed by US President Donald Trump on vehicles imported from the UK.
Revenue fell 9.2 per cent to £6.6bn as the Tata Motors-owned luxury-car maker paused shipments to the US from April as it awaited the outcome of UK-US trade talks.
The sales drop comes as the group, which also makes Range Rovers, overhauls its Jaguar brand with an aggressive shift to all-electric vehicles by the end of the decade.
Earlier this week, JLR appointed PB Balaji, the finance boss of Tata Motors, as its new chief executive following the retirement of Adrian Mardell after three years as chief executive.
Mardell was behind a controversial rebranding of the Jaguar marque but also led the company to achieve its best full-year profit in a decade for the 2024 financial year.
People close to the company said Balaji’s appointment as CEO had been long in the works with the executive sitting on JLR’s board since 2017.
JLR on Friday maintained its annual guidance for an operating profit margin of 5 to 7 per cent, noting that the UK-US trade deal will reduce the tariff costs for the rest of the year.
Under the deal, the US agreed to cut a 27.5 per cent tariff on cars to 10 per cent for the first 100,000 vehicles shipped from the UK. The agreement only came into effect from late June, causing the sharp profit squeeze in the April to June quarter.
“We welcome the deals that have been done, and they will provide certainty for us to plan around,” JLR’s chief financial officer Richard Molyneux said on the Tata call.
He added that the company would continue negotiations with the UK and US to improve the implementation of the quota system from next year.
