British automaker JLR Trim FY26 margin forecast for US tariff concerns

(Reuters) – British luxury automaker Jaguar Land Rover forecasts interest and tax margins from 5% to 7% on Monday amid uncertainty in the global auto industry, which is looming US tariffs.

The company’s Indian parent, Tata Motors, slumped as much as 5.2% in early trade after the announcement.

The revised EBIT margin forecast is also below the reported 8.5% margin for JLR for the previous fiscal year ended March 31st.

JLR added that it is seeing free cash flow near zero for fiscal year 2026.

The company, which causes more than a quarter of sales from the US, temporarily suspends cargo to the country after President Donald Trump slapped 25% of its obligations on all foreign-made vehicles sold in the world’s second-largest auto market.

The “Defender” sports utility vehicle manufacturer said it would redeploy available units into “accessible markets” to increase profits.

It adds that it remains involved with both the US and UK governments regarding the trade agreement signed in May, allowing the UK to export 100,000 cars per year to the US at a 10% tariff, below the 25% tax of other countries.

JLR’s Range Rover SUV lineup is manufactured in the UK, while the popular “Defender” is made in Slovakia, a member of the European Union that does not have a trade agreement with the Trump administration.

The automaker said it is assessing US pricing behavior to offset the impact of tariffs.

Analysts say JLR may not be affected by increased tariff-related costs thanks to a wealthy customer base, which is unlikely to be blocked by a larger price tag.

However, Tata Motors is one of the most exposed Indian automakers for US duties, unlike most rivals in JLR, including German brands Mercedes-Benz and BMW, with JLR having a shortage of local domestic manufacturers.

(Reporting by Kashish Tandon and Nandan Mandayam of Bengaluru, edited by Nivivtacharjee and Rashmi Aihi)