Ever since US President Donald Trump assumed office earlier in January this year, the entire global auto industry has gone into a topsy turvy. The exorbitant hike in tariffs has evidently unsettled the industry and all OEMs leading to clashes between the US and other governments. Even Britain, which is known to be a close ally of the US, has been irked by Trump’s recent announcements.
This new set of US tariffs under the Trump regime is set to affect Jaguar Land Rover (JLR), one of the most prominent automotive brands in the United Kingdom. The British luxury carmaker may face a £1.6 billion impact due to newly announced US trade tariffs. This was confirmed by Tata Group Chairman N. Chandrasekaran at the company’s 80th Annual General Meeting on Friday.
JLR to face Trump tariff heat
However, he pointed out that mitigation measures are already being implemented to limit the net impact to £600 million. In the AGM, Chandrasekaran said that JLR delivered a solid performance in line with what we guided and recorded revenues of £28.9 Bn and an EBIT of 8.5% leading to a PBT of £2.5 billion. JLR also turned net cash this year. The continued strong performance of the Range Rover and Defender franchise led to this performance.
In India, JLR also started localising CKD manufacturing of the Range Rover and the Range Rover Sport, enabling us to make these brands even more accessible. Chandrasekaran said that tariff was a major concern, particularly for JLR. He explained that without any intervention, JLR’s tariff rate would have increased from 2–2.5% to 27.5%. However, due to the US-UK trade deal, the tariff would instead be reduced to 10%. He further mentioned that even with the 10% tariff, the overall impact would amount to £1.6 billion.
Earlier last week, JLR forecasted lower earnings in FY26. The luxury carmaker predicted a drop in earnings from 10% last fiscal to around 5-7% in the ongoing fiscal, amid uncertainty in the global auto industry as U.S. tariffs loom. Shares of its parent company — Tata Motors — slumped as much as 5.2% in early trade following the announcement.
The company, which generates more than a quarter of its sales from the U.S., had temporarily suspended shipments to the country after President Donald Trump imposed a 25% tariff on all foreign-manufactured vehicles sold in the world’s second-largest automotive market. The maker of the ‘Defender’ SUV stated that it is redirecting available inventory to “accessible markets” in an effort to maximize profits.
The automaker also noted that it remains in discussions with both the U.S. and UK governments concerning a trade agreement signed in May, which permits the UK to export up to 100,000 vehicles annually to the U.S. at a reduced 10% tariff, significantly lower than the 25% rate applied to other countries.
Although JLR’s “Range Rover” SUV range is produced in the UK, the popular “Defender” model is manufactured in Slovakia, a European Union member state that has yet to establish a trade agreement with the Trump administration. The company stated that it is evaluating potential pricing strategies in the U.S. to help mitigate the impact of the tariffs.
Will it affect JLR prices in India?
According to analysts, JLR may experience a relatively limited effect from the higher costs due to its affluent customer base, which is less likely to be discouraged by increased prices. However, Tata Motors remains one of the most vulnerable Indian automakers to U.S. tariffs, as JLR lacks domestic manufacturing facilities in the United States — unlike many competitors such as German automakers Mercedes-Benz and BMW. Therefore prices of JLR models in the USA are expected to witness a hike in the coming weeks.
However, the recent India-UK Free Trade Agreement (FTA) is expected to benefit the automobile industries of both countries. British goods imported into India, especially automotive, will also become significantly more affordable after reduction in tariff. A full-imported model brought via the Completely Built Unit (CBU) route is levied an import duty of 100 percent. Under the FTA, a fully-built car imported from the UK will now be levied only 10 percent. Therefore, expect prices of JLR cars in India to drop in the future.
With inputs from Reuters
