Tata Motors said on Tuesday it is reassessing its annual profitability target for its luxury vehicle unit Jaguar Land Rover (JLR), joining a growing list of global automakers that are facing forecast uncertainty due to recent changes in US tariffs .
The review comes in response to a 25% tariff imposed last month by US President Donald Trump on all foreign-made vehicles sold in the country, the world’s second-largest car market. Imported vehicles have become a central focus of the ongoing global trade tensions, according to Reuters.
JLR, which is headquartered in the UK and considers the US its fastest-growing market, achieved its earnings before interest and taxes (EBIT) margin goal of 8.5% for the financial year ended in March. However, it refrained from reaffirming its previously stated 10% EBIT margin target for fiscal 2026, which was announced in June last year.
“We are assessing our guidance in light of the recent UK-US trade deal announced on May 8 and will provide an update at our investor day on June 16,” Tata Motors said. The company derives around two-thirds of its total revenue from JLR.
The newly signed UK-US trade agreement allows the UK to export up to 100,000 vehicles to the US annually under a reduced 10% tariff, instead of the blanket 25% levy applied to other countries. Despite this deal, analysts anticipate that JLR’s sales in North America could decline this fiscal year. Notably, the company’s popular "Defender" SUV, which is manufactured in Slovakia, is not included in the tariff exemption.
“We'll probably be able to see the implications of all those (tariffs) in the coming quarters,” said Group CFO PB Balaji during a media call.
Tata Motors is not alone in its caution. Other global automakers such as Mercedes-Benz, Stellantis, and Volvo have either withheld or withdrawn their earnings forecasts, citing similar uncertainties.
JLR reported a 1.1% rise in sales volumes for the January-March quarter, driven by continued strong demand for its SUVs in North America and Europe. This performance contributed to Tata Motors posting a fourth-quarter profit of ₹84.70 billion ($993 million), surpassing analysts' expectations of Rs 74.58 billion, according to data from LSEG.
However, the company’s profit fell by half compared to the same quarter last year, which had included a significant one-time tax benefit.
Tata Motors’ shares closed down 1.8% on Tuesday, ahead of the results announcement.
The review comes in response to a 25% tariff imposed last month by US President Donald Trump on all foreign-made vehicles sold in the country, the world’s second-largest car market. Imported vehicles have become a central focus of the ongoing global trade tensions, according to Reuters.
JLR, which is headquartered in the UK and considers the US its fastest-growing market, achieved its earnings before interest and taxes (EBIT) margin goal of 8.5% for the financial year ended in March. However, it refrained from reaffirming its previously stated 10% EBIT margin target for fiscal 2026, which was announced in June last year.
“We are assessing our guidance in light of the recent UK-US trade deal announced on May 8 and will provide an update at our investor day on June 16,” Tata Motors said. The company derives around two-thirds of its total revenue from JLR.
The newly signed UK-US trade agreement allows the UK to export up to 100,000 vehicles to the US annually under a reduced 10% tariff, instead of the blanket 25% levy applied to other countries. Despite this deal, analysts anticipate that JLR’s sales in North America could decline this fiscal year. Notably, the company’s popular "Defender" SUV, which is manufactured in Slovakia, is not included in the tariff exemption.
“We'll probably be able to see the implications of all those (tariffs) in the coming quarters,” said Group CFO PB Balaji during a media call.
Tata Motors is not alone in its caution. Other global automakers such as Mercedes-Benz, Stellantis, and Volvo have either withheld or withdrawn their earnings forecasts, citing similar uncertainties.
JLR reported a 1.1% rise in sales volumes for the January-March quarter, driven by continued strong demand for its SUVs in North America and Europe. This performance contributed to Tata Motors posting a fourth-quarter profit of ₹84.70 billion ($993 million), surpassing analysts' expectations of Rs 74.58 billion, according to data from LSEG.
However, the company’s profit fell by half compared to the same quarter last year, which had included a significant one-time tax benefit.
Tata Motors’ shares closed down 1.8% on Tuesday, ahead of the results announcement.
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