Jaguar Land Rover warns that Trump tariffs will hit profits

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"Jaguar Land Rover Reports Profit Impact from Trump Tariffs"

Jaguar Land Rover warns that Trump tariffs will hit profits analysis cover image

The Guardian 8.0

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Original Article Source: https://www.theguardian.com/business/2025/jun/16/jaguar-land-rover-trump-tariffs-profits-tata-motors

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Raw Article Publish Date: 16 June 2025

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Jaguar Land Rover (JLR), the British luxury car manufacturer owned by Tata Motors of India, has announced that Donald Trump's recently imposed tariffs will negatively impact its profits. The company has temporarily halted vehicle shipments to the United States following the implementation of a 25% duty on all foreign-made cars. The U.S. market is particularly significant for JLR, accounting for over 25% of its total sales. In response to these tariffs, JLR is exploring ways to reallocate its vehicle supply to other markets and is considering increasing prices for its vehicles in the U.S. to mitigate the financial impact. The company has stated its ongoing discussions with both U.S. and U.K. governments concerning a limited trade deal that was established in May, which permits the U.K. to export up to 100,000 vehicles annually to the U.S. with a reduced tariff of 10%, significantly lower than the 25% imposed on other nations.

The production of JLR’s vehicles is primarily based in the U.K., but the Defender model is manufactured in Slovakia, a country still negotiating trade terms with the Trump administration. As a result of these developments, JLR has adjusted its profit margin forecast, reducing it to between 5% and 7% for the year, a decline from the previously anticipated 10%. This revision reflects the broader uncertainties facing the global automotive industry. In the wake of this announcement, shares of Tata Motors fell by over 5%. Despite these challenges, analysts suggest that JLR may be somewhat insulated from the effects of the tariffs due to its customer base, which primarily consists of affluent buyers who may be less sensitive to price increases. However, the lack of manufacturing facilities in the U.S. puts JLR at a disadvantage compared to competitors like Mercedes-Benz and BMW, which have established production in the country, allowing them to avoid these tariffs altogether.

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Source URL: https://www.theguardian.com/business/2025/jun/16/jaguar-land-rover-trump-tariffs-profits-tata-motors

The British luxury carmakerJaguar Land Roverhas warned of a hit to profits from Donald Trump’s tariffs, after the company paused deliveries to the US.

The carmaker, which is owned by India’s Tata Motors, temporarily halted shipments to America after the US president imposed a 25% duty on all foreign-made vehicles. The country accounts for more than a quarter of JLR’s sales.

The company, which makes the Defender sports utility vehicle (SUV), said it was trying to reallocate vehicles to “accessible markets”. It is also considering raising prices in the US to help counter the impact from tariffs.

JLR added that it continued to engage with the US and UK governments regarding alimited trade dealsigned between the two countries in May. It allows the UK to export 100,000 cars a year to the US at a 10% tariff – below the 25% levy for other nations.

Its fellow British luxury carmaker Bentley has also frozen sales to the US, as it waits for lower tariffs from the UK’s trade deal, with no clarity on when the 10% rate will start.

JLR manufactures its Range Rover SUVs in the UK, but the Defender is made in Slovakia, a member of the EU, which has not yet agreed a trade pact with the Trump administration.

JLR lowered its forecast for margins on underlying profits, measured by earnings before interest and taxes, to between 5% and 7% this year, from 10% previously estimated, amid tariffs and the uncertainty in the global car industry, Reuters reported. The company achieved a profit margin of 8.5% in the year to 31 March.

Shares in its Indian parent Tata Motors fell by more than 5% on the news in early trading.

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Analysts said JLR may be shielded to some extent from higher tariff costs as its cars are bought by wealthier customers who are unlikely to be put off by a bigger price tag.

On the other hand, JLR does not have manufacturing in the US, unlike most of its rivals such as Germany’s Mercedes-Benz and BMW.

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Source: The Guardian