Premium aluminium supply shortage adds to the business decline scene of JLR

Tata's Jaguar Land Rover (JLR) production has reduced by 7% due to the supply shortage of premium aluminium. Compared with last FY, Tata Motor's subsidiary JLR production is down from approx. 93,000 to close to 86,000.

Subsequently, Tata Motor's share price dropped by 3 per cent on Tuesday morning, consequent to its sales decline of JLR by a similar percentage. The share price opened at ₹918.10 on the BSE today, 1 per cent lower than its Monday closing of ₹928.10. Tata Motors' share price thereafter declined to ₹893.90, with retribution of over 3 per cent.

Jaguar Land Rover's sales apart from production, including the joint venture Chery Jaguar Land Rover in China, has also decreased by 3 per cent, summing up to 103,108 units in Q2 FY25 compared to the same period last year, Q2 FY24.

Earlier this year, flooding in the entire region in and around Novelis' aluminium production plant in Sierre, Switzerland, resulted in the complete manufacturing process shutdown of the mill. Whereas, as per Tata Motor's official statement, some of the principal components required for use in Jaguar Land Rover vehicles are aluminium sheets (for in-house stamping) or externally pre-stamped forms, aluminium castings and extrusions, and items such as alloy wheels, fuel injection systems, electrical wiring systems among others.

As forecasted regarding the normalisation of supply in the second half of the year, JLR is confident it will return to normalcy in both sales volume and production count.