Car dealership giant Vertu Motors faces a potential £5.5 million blow to its annual profits following major disruption to its Jaguar Land Rover showrooms. The luxury carmaker was forced to shut down operations after falling victim to a serious cyber attack.
The timing proved particularly damaging as September represents a crucial month for the automotive industry when vehicle number plates change. Vertu's trading performance took an immediate £2 million hit during September alone due to the widespread disruption.
Production halt and recovery
JLR was compelled to halt production across all its UK factories following the cyber attack, creating significant challenges for both the manufacturer and its supply chain. The company is set to resume some manufacturing operations on Wednesday as systems gradually come back online.
Vertu, one of Britain's largest car retailers, expects the one-off financial impact to reach up to £5.5 million depending on how quickly JLR's systems and normal trading can be fully restored. The company is now assessing whether to make a claim under its insurance policy, which extends to cover third-party system outages.
Strong financial performance despite challenges
Despite the cyber attack disruption, Vertu reported record half-year sales of £2.51 billion, up from £2.47 billion in the previous year. However, adjusted pre-tax profits fell to £20 million for the six months ending in August, down 10% from the same period last year.
Battery electric vehicle sales surged by 82.4% compared to the previous year on a like-for-like basis. The company attributed this growth partly to improved affordability, with over 40 electric vehicle models now available under £30,000 and some options under £20,000.
Government mandate creates market pressure
New government grants announced during the summer are expected to boost electric vehicle demand in the second half of the year. However, the ZEV mandate requires 28% of all UK new car sales to be electric vehicles in 2025, rising dramatically to 80% by 2030.
Vertu warned these requirements continue to weigh heavily on both manufacturers and retailers, resulting in low overall volumes in the new vehicle market. The company stressed that the car market continues facing upheaval due to the government's zero emission vehicle mandate and broader economic uncertainty.
CEO response and outlook
Chief executive Robert Forrester said: "The group has performed well despite continued upheaval in the new car market due to the Government's policy to electrify the UK car parc." He added: "It was disappointing for the industry to face major disruption across the JLR network following a cyber-attack on the manufacturer during the key plate-change month of September."
Forrester praised his teams' response to the crisis, stating: "I was in awe of the way that our teams reacted to the disruption on customers and to minimise the impact in our 10 JLR dealerships, with the full support of JLR which has responded admirably." He noted: "Whilst the situation is fluid, it appears to be easing in recent days."
Sources used: "PA Media" Note: This article has been edited with the help of Artificial Intelligence.
