Jaguar Land Rover warns US tariffs will hit profit margins
Jaguar Land Rover (JLR) has downgraded its profit predictions for the year as it warned over the impact of President Donald Trump's tariffs and heightened global uncertainty.
The car giant has cut its cashflow expectations in a presentation to investors at its headquarter in Warwickshire.
JLR, which is owned by India's Tata, said it expects margins on underlying profits of between 5% and 7% this financial year.
It had previously pointed towards 10% for the year, while it posted an underlying profit margin of 8.5% for the year to March.
The firm is the UK's largest employer in the automotive sector, with facilities in the West Midlands and Merseyside building its Range Rover SUV models across the UK.
JLR, which manufactures its Defender models in Slovakia, halted all shipments to the US in April after President Trump's administration imposed an additional 25% tariff on car imports.
It restarted shipments last month after the UK reached an agreement to export 100,000 cars a year to the US at a reduced 10% tariff.
The company told investors it is seeking to offset tariffs by reallocating vehicles 'to accessible markets' and potentially increasing prices in the US.
Free cashflow for this financial year is also expected to be close to zero due to financial pressures, the company added.
Bosses stressed that the company is still committed to its long-term investment plans and still expects a 'resilient financial performance' in the face of wider uncertainty.
Tata Motors shares dropped by 3.8% on Monday as a result.
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