Vertu Motors Sees Risk to Vehicle Prices, Demand if Iran War Persists
Vertu Motors' Financial Performance and Market Challenges
May 13 (Reuters) - Vertu Motors warned on Wednesday a prolonged Iran war could hit vehicle prices and demand as the UK car dealer posted lower annual profit, hurt by government EV sales targets and disruption from last year's cyberattack at Jaguar Land Rover.
Impact of Geopolitical Tensions
Vertu said it had yet to see a direct impact from the conflict, but its warning adds to signs of strain across the sector as households contend with higher living costs and delay big-ticket purchases, prompting profit downgrades and cost cuts by companies.
Current Trading and Cost Management
However, the group said trading profit in the first two months of its new financial year, which began in March, was ahead of the prior year, helped by strong aftersales and cost reductions.
Passing on Higher Costs
Vertu said it would pass on higher oil-related costs to customers, with its exposure at current energy and fuel prices at about 1 million pounds ($1.4 million).
The company's shares fell as much as 4.5%.
Sales and Margin Pressures
Government Mandates and Revenue Distortion
The British government's zero-emission vehicle mandate - which requires carmakers and importers to ensure a rising proportion of their sales are electric - was distorting revenues and forcing heavier discounting, squeezing margins, Vertu said.
Demand Fragility and Market Outlook
That pressure comes as industry demand remains fragile. A sector body this month cut its 2026 UK forecast for zero-emission vehicle sales.
Interest in Electric and Hybrid Vehicles
However, Vertu said it was seeing some increase in interest in battery-electric and hybrid vehicles as higher fuel costs push motorists to consider alternatives.
Annual Profit and Cyberattack Impact
Adjusted pretax profit for the year ended February 28 fell 16.4% to 24.5 million pounds.
Jaguar Land Rover Cyberattack
The company said a cyberattack at Jaguar Land Rover disrupted vehicle supply and reduced availability of certain models, cutting Vertu's gross profit by about 3.9 million pounds. This was largely offset by 3.4 million pounds of insurance proceeds.
($1 = 0.7388 pounds)
(Reporting by Nithyashree R B in Bengaluru. Editing by Mrigank Dhaniwala and Mark Potter)
