A hard Brexit could cost Jaguar Land Rover £1.2bn a year in lost profits, UK boss warns

JLR chief executive Dr Ralf Speth said it was essential the UK maintained free and frictionless trade with the EU or future investment at plants such as Halewood would be threatened. Tony McDonough reports

JLR Halewood
Jaguar Land Rover employs more than 4,000 people at its factory in Halewood

 

A no-deal Brexit will cost carmaker Jaguar Land Rover (JLR) £1.2bn in lost profits every year and see investment at its UK plant, including Halewood, “drastically” cut.

Dr Ralf Speth, chief executive of JLR,  followed Airbus and BMW in making a chilling warning of the potentially disastrous impact of a hard Brexit could have on its the business.

Late last month JLR gave more than 4,000 Merseyside workers at Halewood cause for celebration when it announced the new generation of the Land Rover Evoque would be built at the factory, where the top-selling Discovery Sport is also assembled.

However, in an interview with the FT Dr Speth said that although the company’s “heart and soul” was in the UK, the spectre of a no-deal Brexit could have a significant impact on its business and its 40,000 employees across the country.

Brexit a threat to UK automotive sector, says industry leader – click to read more

He added: “However, we, and our partners in the supply chain, face an unpredictable future if the Brexit negotiations do not maintain free and frictionless trade with the EU and unrestricted access to the single market.

“We urgently need greater certainty to continue to invest heavily in the UK and safeguard our suppliers, customers and 40,000 British-based employees. A bad Brexit deal would cost Jaguar Land Rover more than £1.2 billion profit each year.

“As a result, we would have to drastically adjust our spending profile. We have spent around £50bn in the UK in the past five years, with plans for a further £80bn more in the next five.

“This would be in jeopardy should we be faced with the wrong outcome.”

Until the latest comments JLR, owned by India’s Tata Motors, had been the exception in the UK car industry in being outwardly quite relaxed about the prospect of Britain’s departure from the European Union in 2019, although it had raised it as a potential challenge in company report.

There had been more concern about the future of the Vauxhall plant in Ellesmere Port with  French owner PSA warning the factory’s future was far from certain.

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