JLR faces a bumpy ride amid weak global demand, cyber-attack loss

Tata Motors-owned British luxury carmaker Jaguar Land Rover (JLR) is facing weak demand in key markets such as China and Europe even as it slowly recovers from a debilitating cyber-attack that shut down its plants for the entire month of September.

“Global demand remains challenging. I think China is an area where concern is still there in terms of volumes from a retail perspective. At the same time, tariffs coming up is a stress from the US perspective. Demand environment for JLR won’t be easy,” PB Balaji, Group Chief Financial Officer, Tata Motors, said during a media conference call after the company announced its second-quarter earnings.

These headwinds come at a time when JLR is still recovering from the cyber-attack. The luxury carmaker did not produce any car in September and restarted production from October 8. It also revised downward its EBIT margin guidance for FY26 in the range of 0% to 2% from 5% to 7% earlier.

“The lost volume from cyber-attack, even with a favourable mix, cost us 237 million pounds. The Trump penalty even in a low volume quarter was 70 million pounds. Cumulatively, it was 328 million pounds in the first half,” Richard Molyneux, Chief Financial Officer at Jaguar Land Rover, said during an analyst call after Tata Motors Passenger Vehicles announced its quarterly results.

Tariffs on JLR cars exported to the US from the UK have gone up to 10% from 2.5% while the Defender SUVs, exported from Slovakia in Europe, attract 15% tariffs in the US.

JLR’s demand from China, too, was hit after the country announced a new tax on luxury cars in July.

“China’s luxury segment continues to shrink, Europe is struggling and the US, while stable, is not in a position to absorb global capacity from the other regions,” Molyneux said, warning that production loss due to the cyber-attack will continue impact “quite heavily” on Q3 performance.

Balaji, who took over as the CEO of JLR in November, said that JLR is back to full production now. “There is an impact in October as well. So, this impact is spread over two quarters in terms of production losses. From here on, we do see production to ramp up. We will not be in a position to catch up on the lost production weeks in the rest of the year. That’s the reason you are finding that Q3 will be a weak quarter and in Q4 we should get back to full normalcy,” he said.

“From a demand perspective, it is fair to say that global demand remains challenging. Cyber incident is just one part of the challenges that are currently being dealt with...We are aware of the challenges we are dealing with. We believe we will come out of this situation much stronger,” he said.

JLR revenues dropped by 24% year-on-year to 4.9 billion pounds in Q2FY26. There was an additional loss of ₹2,600 crore for certain expenses related to cyber incident and voluntary redundancy programme at JLR, the company said.

As a result, Tata Motors’ net auto debt increased from a net cash position at the end of last fiscal to ₹20,000 crore, primarily due to JLR.

To prevent cyber-attacks in the future, Balaji said: “There is a Tata Group-wide initiative that’s also taking off on how we harden systems and make the systems resilient. The head of digital for the Tata group is leading it. You should see a lot of action at the group level as much as work we are doing in the respective companies.”