Jaguar Land Rover is one of a number of luxury carmakers that have been severely affected by the flooding in Switzerland, which paralyzed a leading aluminium manufacturer.
After Novelis – an Indian manufacturer with a mill located in the alpine town of Sierre – was forced to close its operations at the end June, the company is now scrambling to locate alternative suppliers. Porsche, BMW, and Mercedes are also affected.
The floods in Switzerland were caused by the Rhone River, which is located near Novelis and other aluminium manufacturers.
JLR said that this issue, along with the normal summer plant closures, was partially to blame for “constrained production”, which it expects to experience from July through December of this year.
Novelis’ aluminium alloys are used for car body panels and parts.
A spokesman said that the production continued, but the automaker was searching for alternatives to Novelis through its own channels as well as and Tata.
She stated: “Our priority to minimize any impact on production and, in turn, client orders. We are now working with Novelis in order to understand the recovery plan of JLR.
We have been in good discussions with other suppliers including our own Tata group to source aluminum from elsewhere.
JLR’s full-year forecast for profit remained unchanged, even though it revealed its aluminium problem in its first quarter results.
Novelis’ closure has caused a ripple effect on Porsche, which is now the second luxury car brand to be affected.
Porsche warned investors that it is now experiencing “a significant shortage” of aluminum alloys. The aluminium supply shortage has affected other German automakers, including Mercedes and BMW. However, both companies have stated that they have found alternatives.
Novelis declared force majeure to its customers – this is when one party of a contract absolves themselves of their obligations due to factors beyond their control.
JLR, on the other hand, reported a 5pc increase in sales for its first quarter, which is a record. Profits rose by 59pc, to £693m, also a British company’s highest ever.
The company said that it would increase its investment from £15bn in five years to £18bn, to support the conversion to electric vehicles. This will include developing new models and upgrading factories. This is equivalent to an increase of £600m per year, bringing the average annual investment to £3.6bn.
JLR employs 20,000 people in the electrification of vehicles and digital skills. 95pc mechanics in its partner garages have also been trained to work with electric vehicles.
The company is preparing to deliver the first Range Rover fully electric model in the coming year. Meanwhile, the first of the new generation of Jaguars are being tested under tight security.
JLR’s Chief Executive, Adrian Mardell said: “JLR delivered outstanding results in the first three months thanks to the hardwork and commitment of its people.”
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