9:01 am, November 11, 2024
JLR has reported a 10% slump in profits with bosses pointing the finger at supply chain issues.
The British carmaker has announced a pre-tax profit of £398m for the three months between August and September – a tenth lower than the same period in 2023.
Directors say that the results were skewed by a shortage of aluminium which significantly slowed car production.
While not naming the specific supplier, the company said its aluminium provider had experienced supply disruptions in recent months, which had caused a drag on earnings.
Aluminium manufacturers have reported that heavy rainfall in Europe over the summer had led to flooding and therefore halted production at key plants.
The issue also impacted the JLR’s revenues, which stood at £6.5bn – 6% lower than last year.
Adrian Mardell, JLR’s chief executive, said staff had ‘responded brilliantly’ to the supply shortages which meant the firm could ‘deliver as many orders as possible to clients’.
However, the company has admitted that it has placed a temporary hold on more than 6,000 vehicles which now need extra quality control checks.
The situation is due to improve in the coming months, with production and wholesale volumes expected to pick up strongly, JLR said.
Over the six months to the end of September, JLR’s profits jumped by a quarter year-on-year to £1.1bn.
The company made its biggest profit in nearly a decade last year, which it said was driven by record sales of its Range Rover vehicles.
On Friday, it revealed that more than 2,900 orders had been placed for the recently launched Land Rover Defender Octa model which is selling at £145,000.
There are also about 48,000 people on a waiting list for the new Range Rover Electric car.
The company is planning to invest £500m into electric vehicle production at its Halewood plant in Merseyside.
It said half of this total had already been spent, including on new car production lines and robotics.
JLR, which is owned by Tata Motors, has made a profit for two years after steering a turnaround strategy which focused on its highly-profitable cars.
