Jaguar Land Rover (JLR) has stated that it will need access to the single market beyond Brexit to stay competitive and greater certainty to continue to invest in the UK. Photo: Reuters
New Delhi: As UK continues with its negotiations to ensure a favourable trade deal with the European Union before “Brexit”, the management of Britain’s biggest car manufacturer Jaguar and Land Rover (JLR), and its parent company Tata Motors Ltd have stated that Britain’s decision to exit from the bloc is in ‘no-one’s interest’ and will only increase bureaucracy and reduce the competitiveness of the automobile industry.
The company also stated that it will need access to the single market beyond Brexit to stay competitive and greater certainty to continue to invest in the UK.
The Tata Motors-owned company has already been reeling with the adverse impact of unfavourable movement of the pound against the dollar in the aftermath of the Brexit.
“Jaguar Land Rover and Tata Motors have always maintained that the uncertainties from Brexit are avoidable and the business seeks clarity to ensure that industry takes timely and right decisions to manage the transition. Additionally, Jaguar Land Rover needs free and full access to the single market beyond transition to remain competitive which we also firmly believe is in the best long term interests of the United Kingdom,” said P Balaji, chief financial officer, Tata Motors Ltd in a press statement.
JLR, though, on its part, is trying to reduce its dependence on UK by shifting some of its manufacturing to production capacities outside the UK. On Thursday, JLR said that if the UK leaves The European Union without maintaining a smooth trading relationship with the bloc then it would cost the comapny £1.2 billion worth of the net profit each year.
In a statement issued on 5 July, JLR CEO Ralf Speth said that the company would have to drastically adjust its spending profile. JLR has spent around £50 billion in the UK in the past five years—with plans for a further £80 billion more in the next five. This would be in jeopardy should the company be faced with the wrong outcome.
“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. As this worst case Brexit scenario is just one of the many possibilities, our plans which were shared at the JLR analyst meet in the UK did not factor them and we continue to stand by what was shared” added Balaji.
At 2.38 pm on Thursday, Tata Motors shares were down 2.15% to Rs 261.25 on the BSE, while the benchmark Sensex was flat at 35,660.08 points.