Jaguar Land Rover restarts production after cyber attack

Deliveries to dealers dropped during the shutdown which put supply chain at risk

The production line at Jaguar Land Rover’s factory in Solihull, Britain, is being restarted. Reuters

Jaguar Land Rover (JLR) is restarting production across its UK sites today after weeks at a standstill following a cyber attack.

The carmaker’s operations were halted at the end of September by the attack, which threatened its supply chain and led to a British government offer of a loan guarantee.

On Tuesday, the company revealed a sharp drop in sales over recent months, made worse by a production freeze since the start of September after the hack.

It said it had been a “challenging quarter” as it also grappled with the impact of higher US tariffs. Sales fell by 17.1 per cent to 85,495 units between July and September, compared with the same period a year ago, with UK sales dropping by nearly a third. Deliveries to dealerships tumbled, with wholesale falling by 24.2 per cent year-on-year to 66,165 units.

Manufacturing was beginning again at its engine plant in Wolverhampton and its battery assembly centre in Coleshill, Birmingham, on Wednesday.

Stamping in Castle Bromwich, Halewood in Merseyside, and Solihull, together with key areas of its Solihull vehicle production plant, such as its body shop, paint shop and its logistics operations centre, which feed parts to the group’s global manufacturing sites, also returned to operation.

JLR said this will be “closely followed” later this week by operations at its vehicle manufacturing in Nitra, Slovakia, as well as the Range Rover and Range Rover Sport production lines in Solihull.

The carmaker unveiled plans for a new financing scheme for struggling suppliers to fast-track payments, with cash upfront for qualifying firms.

Chief executive Adrian Mardell said performance had been “robust” before the shutdown. “We know there is much more to do but our recovery is firmly under way,” he said.

JLR has the largest supply chain in the UK automotive sector, which employs about 120,000 people and is largely made up of small and medium-sized businesses.

The government recently announced it would underwrite a £1.5 billion loan guarantee to JLR to give suppliers some certainty over payments, helping bolster JLR’s cash reserves, but calls mounted for more to be done.

On Wednesday, car dealership group Vertu Motors warned it could face a hit to its yearly profits of up to £5.5 million as a result of “major disruption” to its Jaguar Land Rover showrooms.

It was “disappointing for the industry” to experience issues during September, a key month for vehicle number plates being changed, Vertu said.

Vertu, which is one of the UK’s biggest car retailers, said it was expecting a one-off hit to its adjusted pre-tax profit for the year, depending on when JLR’s systems and trading are restored.

Its trading performance in September was affected by £2 million because of the disruption.

Danni Hewson, head of financial analysis at AJ Bell, welcomed the restarting of production at JLR, acknowledging it would provide “welcome relief for the thousands of small suppliers that have been impacted by the shutdown”.

“It’s been a long hard trudge for Jaguar Land Rover… but the car maker finally seems to be getting back in gear,” he said.

“The carmaker was already on the back foot as it tried to steer a course through US tariffs and there’s no surprise that its latest sales figures fell more than 17 per cent in the three months to September.

“The big question now is whether all of those complex pieces of the puzzle can come back together quickly or whether any of those small businesses have been pushed too far.

“Speeding up payment to suppliers will go a long way to helping them pick up the pieces but making sure even the smallest cog is able to turn will require careful consideration.”