The British luxury carmaker Jaguar Land Rover has warned of a hit to profits from Donald Trump’s tariffs, after the company temporarily paused deliveries to the US.
The carmaker, which is owned by India’s Tata Motors, halted shipments to America in April after the US president imposed a 25% duty on all foreign-made vehicles, before resuming them last month. The country accounts for more than a quarter of JLR’s sales.
JLR, 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 to counter the impact from tariffs.
JLR added that it continued to engage with the US and UK governments regarding a limited trade deal signed between the two countries in May. The deal allows the UK to export 100,000 cars a year to the US at a 10% tariff, compared with the 25% levy for other nations.
Its fellow British luxury carmaker Bentley also halted sales to the US as it waited for lower tariffs from the UK’s trade deal, with no clarity on when the 10% rate will start.
While orders placed directly by customers are still shipped to the US, Bentley has stopped exports of vehicles that would sit at dealerships before being sold. All its cars are produced in Crewe, Cheshire.
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.
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Shares in Tata Motors fell by more than 5% on the news in early trading.
Analysts said JLR might be shielded to some extent from higher tariff costs as its cars were bought by wealthier customers who were 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.
