The U.K’s two-year-old referendum that resulted in the historic decision to leave the European Union is continuing to trouble automakers with operations in the country, and the last 24 months have hardly produced less uncertainty over what it means for their businesses.
The financial futures of those automakers with significant assembly operations in the U.K. remain murky. Top U.K. politicians have been unable to provide clarity on the U.K.’s future status as it leaves the single market and the EU customs union.
Two years after the deciding vote big industrial manufacturers are still not sure if they’ll have unrestricted access to the EU market, or what it could cost them.
Jaguar Land Rover CEO Ralf Speth came out this week
Jaguar Land Rover CEO Ralf Speth came out this week. Had thinly disguised statements of intent regarding the post-Brexit economic landscape and JLR’s overall future in the U.K., days ahead of a crucial meeting between U.K. cabinet ministers and Prime Minister Theresa May over the details and costs of the U.K.’s withdrawal from the EU trade network.
More ominously, Speth indicated that an unfavorable scenario for the automaker. The one which would see costly or radical changes to the tariff and customs-free access to the European Union.
“A bad Brexit deal would cost Jaguar Land Rover more than £1.2bn profit each year,” Speth said. “As a result, we would have to drastically adjust our spending profile.”
Jaguar Land Rover is not alone among automakers who could transfer their assembly operations elsewhere. BMW warned last month that it could shutter its U.K. production facilities. Such a move could see significant changes to Mini and Rolls-Royce production. It relys heavily on components made in the EU. That implicates is that both brand’s U.K. assembly operations could be moved to Germany.