Jaguar Land Rover faces production delays due to aluminum shortage

According to company representatives, disruptions in deliveries may last until the end of the year.

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

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

"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 198,000 tons of aluminum annually. This material is widely used in most of the company's models. Competing brands such as BMW, Mercedes, Porsche, and Audi also build their cars using aluminum.

In the coming months, their production may also suffer, as Novelis plants are not the only aluminum 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 these will be sufficient to cover the planned volumes.