Cyberattack drives JLR into £485M loss after weeks-long production halt
What's the story
Jaguar Land Rover (JLR) has reported a massive financial loss for the July-September quarter, owing to a major cyberattack. The luxury carmaker posted a pre-tax and exceptional items loss of £485 million, compared to a profit of £398 million in the same period last year. The attack forced JLR to halt production for several weeks.
Impact assessment
JLR's production and revenue disrupted
The cyberattack, which took place in late August, forced JLR to shut down its computer networks. This rendered its highly automated production lines non-operational for the entire month of September and part of October as well. The extended disruption had a major impact on both output and revenue for the luxury carmaker.
Cybersecurity measures
Tata Motors CFO assures strengthened cyber resilience
P.B. Balaji, Group CFO of Tata Motors, has assured that extensive work is underway to strengthen JLR's cyber resilience. He said, "A lot of work is currently happening on ensuring that such an incident doesn't happen again and we've already hardened the external interfaces." Balaji also emphasized that cybersecurity will remain a top priority for the company going forward.
Financial implications
JLR incurs exceptional cost due to cyber incident
JLR has booked an exceptional cost of around £150 million for the quarter, due to the cyber incident. Balaji said this figure includes costs such as supplier claims from lost production, system restoration, and duplication of systems. He clarified that the biggest impact came from lost production volumes during the downtime caused by the attack.
Financial performance
Revenue and EBIT margin take a hit
In the September quarter, JLR's revenue fell by 24.3% YoY to £4.9 billion due to lost production, planned phase-out of legacy Jaguar models, and US tariff pressures. The EBIT margin also dropped to -8.6%, from 5.1% a year ago. The company reported a post-tax loss of £559 million as opposed to a profit of £283 million in Q2FY25.
Strategic vision
Future outlook and investment plans
Despite the financial setback, JLR remains optimistic about the future. The company expects a FY26 EBIT margin of 0-2% and a free cash outflow of £2.2-£2.5 billion. However, it still plans to stick to its £18 billion five-year investment plan. The recent cyberattack, which led to a five-week production shutdown, is estimated to have cost the UK economy £1.9 billion in damages.