- JLR reported a £451m loss for the July-September quarter, despite generating £5.9bn in revenue
- Around 3,000 of its planned 4,000 job reductions have been confirmed, with most departures expected by the end of November
- Chief executive PB Balaji has urged Britain and the EU to avoid trade barriers that could make the electric vehicle transition more expensive
Jaguar Land Rover (JLR) has reported a £451m quarterly loss as the Tata-owned carmaker absorbs the costs of a major restructuring programme and confronts weaker demand in China and the Middle East.
The manufacturer recorded £530m in exceptional charges during the three months to September 30, including costs linked to its plan to reduce around 4,000 jobs over two years. About 3,000 voluntary departures have already been confirmed, with most affected employees expected to leave by the end of November.
Revenue rose 20.3 per cent year on year to £5.9bn, while the loss after tax narrowed from £559m in the same quarter last year. The earlier period was heavily affected by the cyber attack that disrupted JLR's production and operations.
Excluding exceptional items, the company recorded a £6m profit before tax, compared with a £485m loss a year earlier. Its adjusted operating margin, however, stood at just 1.1 per cent, reflecting pressure on profitability despite the revenue recovery.
The results underline the challenge facing JLR as it tries to reduce costs while investing in electric vehicles and protecting its position in the global luxury car market.
Chief executive PB Balaji has also called for closer cooperation between Britain and the European Union, arguing that additional trade barriers could make it harder for manufacturers on both sides to compete with Chinese electric vehicle makers.
Why has JLR's financial outlook weakened?
The company has reduced its full-year adjusted earnings before interest and tax (EBIT) margin forecast to between 2 and 3 per cent, from around 4 per cent previously. It also expects a free cash outflow of approximately £1.25bn during the financial year and revenue of about £25bn.
JLR attributed the revised outlook to market challenges, geopolitical risks and exceptional restructuring costs. Its free cash outflow for the July-September quarter was £540m, while its adjusted EBIT margin was 1.1 per cent.
China remains a particular concern. JLR said the market had contracted by almost 30 per cent, with falling volumes affecting its performance. The Middle East also remained weak, although stronger wholesale volumes in the UK and other overseas markets helped offset some of the decline.
Chinese manufacturers have become increasingly competitive, particularly in electric vehicles, where established carmakers face pressure on pricing, technology and product development. JLR is also dealing with the costs of developing new models while maintaining its existing luxury vehicle business.
The company is targeting £1.7bn in savings over the next two years through a programme covering manufacturing, materials, logistics and warranty costs. It also wants to reduce the number of vehicles it needs to sell to reach cash break-even to around 300,000 annually.
Reuters reported that £295m of the exceptional charges related to voluntary redundancies. The wider £530m figure also includes other restructuring expenses and asset write-downs, rather than representing the cost of job cuts alone.
The workforce reduction is expected to affect employees across JLR's operations and forms part of a broader effort to simplify the business. The company is seeking to lower its cost base while continuing to invest in new products and manufacturing capabilities.
Why is JLR calling for closer UK-EU cooperation?
Balaji said the growing competition from China made it important for Britain and the EU to work together rather than introduce new trade barriers.
The industry is concerned about rules of origin requirements due to take effect on January 1, 2027. Under the arrangements, electric vehicles traded between the UK and EU could face 10 per cent tariffs if they fail to meet requirements governing the origin of their components, including batteries sourced from Asia.
The EU is also considering proposals that could favour vehicles manufactured within Europe when determining eligibility for subsidies, potentially putting UK-built models at a disadvantage.
"Now is the time for actually fostering this entire electrical ecosystem," Balaji said.
"It's so important for us that we all hold hands, stick together and ensure that we get the system to evolve into the world of electrics."
He added: "We just need time to ensure all these plans start coming into fruition."
The rules matter to JLR because its manufacturing operations are based in Britain, while its supply chains depend on components sourced from international markets. Additional tariffs could increase production costs and complicate the economics of selling electric vehicles across Europe.
Despite the financial pressure, JLR is continuing with its electrification plans. It has launched three luxury electric vehicles: the Range Rover Electric, Range Rover Sport Electric and Jaguar Type 01, all built in Solihull, with deliveries expected to begin in early 2027.
The company is also preparing a new Range Rover GT and an electric Defender, both expected to be built at its Halewood facility. Its planned investment in new products and technologies forms part of a wider £15bn-£18bn commitment, of which £11.5bn has been invested since 2024.
North America is another priority. JLR reported a 20 per cent year-on-year increase in wholesale volumes there during the first half of the financial year and is looking to expand its presence in the region. It is also exploring an arrangement with Stellantis, the owner of Chrysler, to manufacture Land Rover vehicles in the US, although a completed agreement has not been confirmed.
The company is targeting double-digit growth in core earnings in the 2028 financial year, supported by new models, cost savings and expansion in North America. Whether it can achieve that ambition will depend on the recovery of demand in key markets and its ability to control costs while funding the shift to electric vehicles
