Jaguar says can't stay in UK in case of ‘hard Brexit’

Joined
Feb 16, 2009
Messages
29,799
Likes
48,278
Country flag
https://www.thehindubusinessline.co...-exit-uk-post-hard-brexit/article24337948.ece

The carmaker says ‘hard Brexit’ would cost it 1.2 billion pounds
EDINBURGH, JULY 5

Britain's biggest carmaker Jaguar Land Rover said a so-called “hard Brexit” would cost it 1.2 billion pounds ($1.59 billion) a year, curtailing its future operations in the United Kingdom.

“We urgently need greater certainty to continue to invest heavily in the UK and safeguard our suppliers, customers and 40,000 British-based employees,” JLR's Chief Executive Ralf Speth said in a statement on Wednesday.

JLR joins a growing list of companies which have raised concerns about potential disruption to business if Britain crashes out of the bloc next March without a trading agreement with the European Union, a so-called hard Brexit. “The recent statement from JLR only reaffirms this position that a Brexit which increases bureaucracy, reduces productivity and competitiveness of the UK Industry is in no-one's interest,” JLR's Indian parent firm Tata Motors Ltd said in a statement on Thursday.

Tata Motors shares plunge
Shares in Tata plunged to their lowest in more than five years on Thursday, as investors turned jittery on the company, whose biggest business is JLR, which contributed nearly 77 per cent of its total revenue in the year ended March 31, 2018. “Prima facie, 1.2 billion pounds looks on the higher side and hence the reaction to the stock today,” said Basudeb Banerjee, an analyst with Ambit Capital.

Speth's comments come ahead of a meeting on Friday between Prime Minister Theresa May and her cabinet ministers to decide on strategy for Britain to negotiate its way out of the European Union, ending a 40-year trading relationship.

Because of uncertainty about what Britain actually wants from the EU after it leaves, the outcome of the cabinet meeting is seen as critical to progress in talks with the EU on the issue. Recent weeks have seen criticism of the government by some of the biggest companies operating in Britain.

Airbus and Siemens last week went public with their fears about what leaving the EU customs union and single market would mean for their businesses.

JLR said it needed “free and frictionless trade with the EU and unrestricted access to the single market. “A bad Brexit deal would cost Jaguar Land Rover more than 1.2 billion pounds in profit each year. As a result, we would have to drastically adjust our spending profile; we have spent around 50 billion pounds in the UK in the past five years - with plans for a further 80 billion pounds more in the next five,” Speth said in a statement. “This would be in jeopardy should we be faced with the wrong outcome.”

($1 = 0.7557 pound)
 

Armand2REP

CHINI EXPERT
Senior Member
Joined
Dec 17, 2009
Messages
13,811
Likes
6,734
Country flag
I think it's generally uneconomical for the company to stay in the UK. It would be better off moving production to India.
They need to be in the EU customs union which is the whole point of them saying this. I think having them based in France would be good for both.
 

abingdonboy

Senior Member
Joined
Sep 13, 2010
Messages
8,039
Likes
33,573
Country flag
I think it's generally uneconomical for the company to stay in the UK. It would be better off moving production to India.
Production would only move to India entirely if India was able to secure the FTA with the EU. The reason many car manufacturers are in the UK is because it gives the access to the single market with no tariffs. If Brexit means there are tariffs imposed from UK goods then JLR will probably move to France or Germany or maybe even Poland.


(Indian and regional JLR sales are made in India already)
 

Latest Replies

Global Defence

New threads

Articles

Top