Jaguar Land Rover set to lose 36% volumes in H1 to chip shortage; H2 to generate higher production

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26 Aug, 2025 12:21

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Jaguar Land Rover expects to end the first half of the year with a 36 percent loss in volumes due to the on-going semiconductor shortage though the second half is expected to see better supply of chips and improvement in vehicle production, a top company official said on July 7.

Supply of chips from Japan and North America are predicted to improve in the upcoming months but not before JLR loses nearly 100,000 units in the April to September period. From the targeted 235,000 units during the first half of the year the two Tata Motors-owned British brands are expecting to clock wholesales of 145,000 to 150,000 units.

JLR on July 6 warned of a 50 percent reduction in wholesale volumes during the July-September (Q2) quarter. The revised guidance for Q2 is wholesales of 60,000-65,000 units, down from 120,000 units predicted in May.

In a conference call held on July 7, Adrian Mardell, CFO, Jaguar Land Rover said, “Supply of chips will come onboard in Japan and North America over the course of second half. Production of vehicles will be higher in the second half than the first half for the reason. This (the chip shortage) is a temporary supply phenomenon and in the meantime customer demand is growing. Our obligation is to service those orders as soon as we can.”

Through the analyst call today JLR tried to pacify anxious investors who reacted negatively post the announcement on July 6, which resulted in the Tata Motors stock hitting the lower circuit on the BSE before closing 8.4 percent down compared to July 5.

Mardell added that the shortages will neither have any impact on the product launch schedule of JLR nor on the capital expenditure plan for the year. “There will be no delay in the new Range Rover although the initial production will depend on the chip supply at that time. Capex for the first half will be consistent with the full year guidance. There will be no delay in capex on new product,” Mardell added.

JLR has provided a capex guidance of GBP 2.5 billion for FY22. Capex for Q1 will be GBP 600 million with a similar figure expected in Q2. “Q2 cash position is going to be much worse than what we were expecting because the wholesale will be 50 percent lower. We are expecting a dramatic rebound (in demand) once we hit normal levels of chip supply,” Mardell added.

JLR’s total inventory number by end of June was about 74,000 units and the production levels for Q2 is going to be somewhere between 55,000-60,000 units, JLR added.

While JLR is sitting on an order backlog of 110,000 units, a significant portion coming from the new Defender, it has seen insignificant cancellations “We have had very few cancellations, which are tens of units,” Mardell added.