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Jaguar Land Rover (JLR) is among a string of luxury carmakers to be hit by major disruption after flooding in Switzerland paralysed a top aluminium producer.
The company is scrambling to find alternative suppliers after Novelis, an Indian-owned manufacturer that runs a mill in the alpine city of Sierre, was forced to shut down operations at the end of June. Porsche, BMW and Mercedes have also been affected.
It followed heavy rainfall and subsequent flooding in parts of central Europe, with Novelis and other aluminium producers in Switzerland hit by floods from the nearby Rhone river.
JLR said this issue was partly to blame – along with normal summer plant shutdowns – for the “constrained production” it now expects from July to December this year.
It is understood that the aluminium alloys Novelis produces are used in car panelling and body parts.
A spokesman added that production was continuing but the carmaker was hunting for alternative suppliers to Novelis, both through its own channels and with help from parent company Tata.
She said: “Our priority is to minimise any impact on our production and in turn client orders. So we are working with Novelis to assess the impact on JLR and understand their recovery plans.
“We have had good conversations with other suppliers, including within our own group, Tata, to source aluminium from elsewhere.”
JLR, which revealed the aluminium issue in its first quarter results, also stressed that its full-year profit forecast remained unchanged.
It is the latest carmaker to warn about the problem after fellow luxury brand Porsche was hit by the Novelis closure.
Porsche said it was now facing “a significant supply shortage” of certain aluminium alloys and issued a profit warning to investors. The aluminium shortage has also affected the supply chains of fellow German carmakers BMW and Mercedes but both have said they were able to find alternatives.
Novelis has declared force majeure – when one party in a contract excuses themselves from their obligations because of factors outside of their control – to its customers.
Meanwhile, JLR reported a 5pc rise in first quarter sales to £7.3bn, a record for the British company, as profits rose by 59pc to £693m.
The company also said it was ramping up investment, from £15bn to £18bn over five years, into its transition to electric vehicles, which will involve developing new models and retooling factories. That is equivalent to a £600m-per-year increase, taking the annual average investment to £3.6bn.
As part of this, JLR has 20,000 employees in electrification and digital skills. It says 95pc of mechanics at its partner garages are also ready to work on electric vehicles.