Tata Motors' JLR announces new financial scheme to pay suppliers faster

The company also shared updates as it prepares to begin a phased restart of manufacturing operations from Wednesday, following a cyber incident in early September

Tata Motors’ luxury car unit Jaguar Land Rover (JLR) on Tuesday announced a new financing solution to support the cash flow of its suppliers, the company said in a statement. It also shared updates as it prepares to begin a phased restart of manufacturing operations from Wednesday, following a cyber incident in early September.

Suppliers will be paid faster

The company is fast-tracking a new financing scheme that will provide JLR suppliers with upfront cash during the production restart phase. “With the new scheme, qualifying JLR suppliers will be paid much faster than under their standard payment terms, aiding their cash flow in the near term,” the company said. 

 

 

According to JLR, suppliers will receive a majority prepayment shortly after the point of order and a final true-up payment upon receipt of the invoice. The company’s usual supplier payment terms are 60 days post-invoice, meaning the scheme accelerates payments by as much as 120 days. JLR also said it will reimburse the financing costs for those suppliers who use the scheme during the restart phase.

 

JLR Chief Executive Officer Adrian Mardell said, “Our suppliers are central to our success, and we are launching a new financing arrangement that will enable us to pay our suppliers early, using the strength of our balance sheet to support their cash flows.”

Expansion of the scheme

JLR added that following an initial phase with qualifying suppliers critical to the restart of production, the scheme will be expanded to include some non-production suppliers as well.

 

Since the cyber incident, JLR said it has introduced several measures to support its suppliers, including establishing a dedicated supplier help desk, implementing a manual payment system to settle outstanding invoices, and this week, re-establishing automated supplier payment systems.

Plans for phased restart

Manufacturing operations will begin at the company's Electric Propulsion Manufacturing Centre (EPMC), where it builds engines, and at its Battery Assembly Centre, both located in the West Midlands, United Kingdom.

 

According to the company, employees will also begin returning to the stamping operations in Castle Bromwich, Halewood, and Solihull, along with other key areas of its Solihull vehicle production plant, such as the body shop, paint shop, and Logistics Operations Centre, which supplies parts to JLR’s global manufacturing sites.

 

Stating that this week marks an important moment for JLR, Mardell said, “I would like to thank everyone connected to JLR for their commitment, hard work, and endeavour in recent weeks to bring us to this moment. We know there is much more to do, but our recovery is firmly underway.”