Jaguar Land Rover’s dealers and suppliers fear the British carmaker’s operations will take another few months to normalize after a cyber attack that experts estimate could wipe more than £3.5 billion off its revenue.
JLR, which is owned by India’s Tata Motors, had been forced to shut down its systems and halt production across its UK factories since August 31, wreaking havoc across the country’s vast supply chain involving roughly 200,000 workers.
JLR on Tuesday said it would extend its production halt until at least next Wednesday as it continued its investigation. In a statement, the company also cautioned that “the controlled restart of our global operations… will take time.”
If JLR cannot produce vehicles until November, David Bailey, professor at University of Birmingham, estimated that the group would suffer a revenue hit of more than £3.5 billion while it would lose about £250 million in profits, or about £72 million in revenue and £5 million in profits on a daily basis.
With annual revenues of £29 billion in 2024, JLR will be able to absorb the financial costs but Bailey warned the consequences would be bigger for the smaller sized companies in its supply chain. JLR declined to comment.
The cyber attack comes at a crucial period for the UK carmaker when it is going through a controversial rebranding of its Jaguar brand and an expensive shift to all-electric vehicles by the end of the decade. Even before the latest incident, people briefed on the matter have said the company was facing delays with launching its new electric models.
“They are clearly in chaos,” said one industry executive who works closely with JLR, while another warned that “no one actually knows” when production would resume.
“If there is a major financial hit, the CEO will look for significant cost savings to try and recover some of that, so that could hit both the production base in the UK but also its product development,” said Bailey.