How hard Brexit would hit Jaguar Land Rover and other carmakers

How hard Brexit would hit Jaguar Land Rover and other carmakers

Jaguar Land Rover has
warned that a hard Brexit
would make it very difficult to
continue operating in the UK.
The company said the potential
for paying tariffs could set it
back 1.2 billion pounds
a year, wiping out
the company’s entire
profit, and forcing
it to look outside
Britain for manufacturing
options in the future.
JLR’s the latest carmaker
to warn about this.
BMW, Honda, Toyota, and others
have all said that a Brexit–
a hard Brexit season
paying tariffs–
could make their UK
manufacturing operations
very hard to sustain
in the long term.
Now all the car makers in
Britain are worried about this.
The reason is not
just the potential
for paying tariffs on
their cars that they
export, but huge disruption
to their supply chain.
All of Britain’s
car plants operate
on what’s called a just in
time delivery system, where
the components arrive
at the plant hours–
and sometimes minutes– before
they’re needed on the line.
More than half of
those components
are imported, many of
them from mainland Europe.
Right now they travel
across the border freely
and without checks.
But any Brexit that sees them
stopped for customs, checks,
could delay that supply
chain, and totally
tear up the model that the
manufacturers have been
used to for the last 30 years.
Ultimately, for all the
car plants in Britain,
this comes down to
All of the car plants
around the world
compete for work every time a
manufacturer makes a new model.
Right now, Britain wins
a lot of that work.
We have some of the best
car plants in the world.
But anything that puts those
plants at a disadvantage
makes it less likely that future
work will come to Britain.
And tariffs of 10% on
exported vehicles–
that’s what the car makers
would have to pay under WTO–
that puts the car plants at
a significant disadvantage
to rival plants in Europe
and further afield.
Recently Jaguar Land Rover
moved the whole production
of its Land Rover
Discovery vehicle
to a brand new
plant in Slovakia.
That plant has the capacity
to make hundreds of thousands
of cars a year, and
JLR could very easily
send more work there.
Almost all of the big
manufacturers in Britain
have other plants in Europe
where they could divert work
if manufacturing in Britain
becomes uncompetitive
in the future.
Advocates of Brexit
say that leaving
would free the car makers
to do deals around the world
and export without tariffs.
The problem is Britain has
been a member of the EU
for a long time.
Many of the car plants
in Britain were built–
especially by the Japanese
manufacturers– as
export bases to Europe.
Britain exports 80% of
all the cars it makes.
The problem of
tearing up the system
is that it’s been
so well-established.
It’s very difficult to
repurpose Britain’s factories
to make cars to
sell to other places
without doing serious damage
to the existing supply chain,
and the existing business models
on which many of these car
plants are built.

58 Replies to “How hard Brexit would hit Jaguar Land Rover and other carmakers”

  1. Too much emphasis on diesel powered cars, no golf offering for the masses, petrol powered units fall short on economy compared to the Germans, overpriced e-pace, could've/should've been a belter, sorry I think JLR missed many opportunities, blaming brexit is their scapegoat. I-pace is the future, make a model 3 equivalent full electric and petrol option and sell it for £35k then they'll sell like hot cakes!

  2. England is not going to be abolished to assist a car makers Quarterly figures – OUT OF THE EU, that's what was voted for by millions of people on 23 June 2016.

  3. if jag move to the eu they will get trapped in a trade war with the usa and 25% tariff slapped on the price of a motor..
    independent britain wont be in a trade war with the usa……this is fake news bollocks..more globalist hands around firms throats. making them scaremonger…
    just like airbus balls and bmw change the statment the very next day saying it was a twerp europhile making unofficial statement off his own back… move along folks its just remoron bs Again.

  4. ok, just put tariffs on cars that don't manufacture in this country who wants to sell to this massive market.

  5. free trade is a myth my friends…which has been sold to many in UK along with the unicons. Yes that con was intentional

  6. The primary problem is not WTO tariffs or the sinking pound making dollar, euro, yen imports more expensive, the primary problem is the symbiotic relationship car manufacturers have with their suppliers. The supplier is often a highend specialist who knows his components better than anybody else and can make and deliver them to a given quality and price. They cannot just be tendered for on the world market as Brexiteers claim. And JIT delivery works less well the further away the source – a simple result of weather vagaries (and WTO rules). These are just a few of the issues car managers know more about than politicians who have never learnt a proper trade. All the big car manufacturers exist with a hinterland of a large single market, which Britain, or maybe just England, is not.

  7. Let's remember that Theresa May's only constituency is the City of London Corporation . The square mile.. Not London, not Britain. Not Great Britain. She will trade away all of Great Britain, to protect it.

  8. Boris Johnson was right. You need President Trump to help Britain make sanity of the EU.
    MERKEL CAVES: Germany Says It's Open to EASING TARIFFS on US CARS

  9. This is the very reason why foreign takeovers of British manufacturers doesn’t work. Take Kraft foods for example, and their recent takeover of Cadbury’s. A British cultural institution in confectioneries. They promised if they took over Cadbury’s, they wouldn’t move manufacturing to Poland, and low and behold they never kept their word, shipping Cadbury’s abroad. And now with Jaguar Land-rover. But the new owners of Jaguar Land-rover should never forget, its no longer a British product, once its made abroad, all but name. Great Britain should get its act together and stipulate, if you buy our companies, it comes with conditions. Otherwise bugger off.

  10. We Dutch have a saying; One Man's Death Is Another Man's Bread. We already produce Minis, we can produce them all.

  11. Jaguar are moving some production to Slovakia if Brexit goes ahead with no proper deal the only intelligent thing for Jaguar is to move it's entire production there!

  12. Are you lot going to accuse the Financial Times of "Fake" news now?
    Can you imagine how people who work in these industries feel? What if it was your job and your home on the line? Easy to take a principled stance when you have nothing to lose.

  13. there are costs and benefits to every decision, winners and losers that's part of life. Long term the EU will collapse because multiculturalism is failing and we are going to be facing civil war, at that point we are better off out.

  14. Who cares, they are crap vehicles, over priced in an over inflated nation with pathetic wages. Odds are that those vehicle plants are probably owned by foreigners anyway. Labour and their partners in crime the Tories sold the UK off decades ago, there is nothing left other than domestic spying and illegal DNA Data Banks.

  15. Brexit will be good for UK we will open our doors to all company's from around the World Give them great deals that the EU cant match Car manufactures will stay because it wont be worth their salt to move and EU would be begging us to help them out Dont for get we might even not buy German built cars as a knock on effect our any thing from the EU SMALL 500 MILLION PEOPLE COMPERED TO THE AMOUNT OF PEOPLE OUT SIDE OF THE EU

  16. Nissan. Sunderland.
    650 workers be laid off.
    650 families to lose their incomes. Left in poverty
    only two lines running out of three now
    Workers told that production of new quashqui and x- trail ( hailed by brexshitters as proof project fear was a lie ) is totally dependent on remaining in single market and customs union.
    Well done you flag-wagging cretins !
    Come to Sunderland and tell us we should eat feed our kids on" sovereignty ".
    Bring a bag to take your faces home in !

  17. The piece missing from all propoganda arguements is the harm that the EU would inflict on itself by going to WTO rules with its biggest single market (UK). The EU has a huge trade surplus with the UK. The harm the EU would inflict on itself would be much greater than any harm the UK would inflict on itself. Therefore, a free trade deal makes sence for both parties but moreso for the EU

  18. As times goes by, this bring more fresh evidences that those Brexiteers (Nigel Farage, Boris John and Michael Grove) LIED to the public and are working against the economic prosperity and good welfare of all British people, as many large corporations like Airbus, BAE, Jaguar, BMW, Siemens, Unilever… and others will leave and close their factories in Britain, making many of those same Yes Brexit voters jobless without any good future.

  19. Hold on a minute.. I thought Jaguar land rover moved some production to China? is that in the EU? So what effect will that have? Why was that not in the headlines… I mean they are moving out… TOTAL BO–OCKS again… It will have no effect… oh before anybody says anything the plant in Birmingham produces Diesel engines, you know the ones the Government told you not to buy..

  20. JLR is just one of many companies getting ready to leave a sinking island, Japanese german and now uk car builders can move to europe and probably produce the same car for far far less. Thought you'd get a peachy deal instead you get a lemoaner, who was worried about EU workers taking his job now realises the EU owns his company, Good bye everything and i mean everything,

  21. Do you worry? You employing migrant workers-slaves from EU, but you don't care about ordinary citizens of UK. Then go away from this country into EU together with your cheap EU workers.

  22. Unfortunately the falling sales are mainly due to their reliability issues. Hopefully they can get their act together.
    If you are looking for a UK built SUV consider the Honda CRV. They have renewed their commitment to building these great cars in Swindon AND they rarely break down.

  23. A lot of people will lose their jobs with a no deal. Of course the drivers of Brexit don't mind, they see the chance to reduce taxes for the rich and deregulate business practices, it is the common clay (you know, morons) who voted for Brexit who will lose out, with lower wages and higher prices and reduced services. I fear for the NHS most of all, I believe it will be worse than the US system, fractured and excessive prescription costs due to a lack of financial clout with the big drug companies.

  24. All join the Brexiteur chorus now: "Project Fear". Yup, it's all project fear. There is no threat. No jobs will be lost. There will be no consequences to leaving the world's biggest trading bloc- why should there be?? In fact, there is no such thing as trading blocs. Or Europe. Or the UK car industry. See, it was all just figments of Remoaner imagination.

  25. sorry bout that! anyway — all of you well paid people had better be prepared to pay a lot more taxes —- check out the Lisbon treaty in 2020 { end of your still brilliant country!!!!!!!!! }

  26. they are already in a sales talks with the french car company and ,making the Discovery in eastern block of the EU with subsidy's from the EU owned by and Indian .the EU are in talks with Japan on direct trade deals .BMW and VW source 90% of their parts from Germany ,Brazil and other EU states

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