Jaguar Land Rover faces production delays due to aluminium shortage

Jaguar Land Rover's biggest problem is the shortage of aluminium, which is caused by issues with a key sub-supplier. This concerns the company Novelis, whose factory in Sierre, Switzerland, was affected by a flood.

JLR's Chief Financial Officer, Richard Molyneux, stated during a press conference on 2 August 2024 that the shortage of crucial material will limit our production until the end of this quarter and into the next.

"Our industrial operations team are very good at finding alternative sources and we are also leveraging the Tata ecosystem to help us in this. So we're not going to give specific numbers. What I will say is within our full year number set, we are aiming to compensate for it such that we can still hit our EBIT and net cash position at the end of this year. We will work through it over the next few weeks. We'll give you a better update at the next quarterly meeting. But we recognize it's a problem and we have all resource focused on short term mitigation and then medium term mitigation to make sure we can hold our full year EBIT and net cash targets," he explained.

Jaguar Land Rover uses approximately 200,000 tonnes of aluminium annually, which is widely used in most of the company's models. Competing brands such as BMW, Mercedes, Porsche, and Audi also build their cars using aluminium.

Their production may also suffer in the coming months, as Novelis plants are not the only aluminium suppliers affected by the floods. According to Automotive News Europe, two Constellium factories were closed due to flooding.

BMW, Mercedes, and Audi have alternative sources. The question is whether they will be sufficient to cover the planned volumes.