Jaguar Land Rover’s chief monetary officer has admitted that if the UK “crashes out” of the EU with no deal, it could price the agency £500 million per 12 months in tariffs on car exports alone.
Autocar discovered the remarks in a document of a gathering between Adrian Mardell and funding banks on the finish of January. Mardell mentioned he “absolutely expects” the present transition interval to final till 1 January 2021, after which there might be “a distinct relationship”.
Mardell additionally mentioned: “We’ve gone by two variations of potential crash-outs already, ultimately of March  and the top of October, and what we did was to guard ourselves by closing the plant for per week.
“We’ll resolve on the again finish of this calendar 12 months whether or not that’s an applicable measure. If we do crash out, if we go to WTO [World Trade Organization rules]… it’s a few £500m responsibility hit – £40m a month.”
It’s uncommon for a senior determine at a significant automobile maker to quantify the price of a no-deal Brexit and resultant use of WTO guidelines. However Mardell additionally reckons that if the UK does discover itself on this scenario, it gained’t be for lengthy.
“I don’t personally imagine that we’d actually be at these WTO ranges for a major time frame,” he mentioned. “I believe it could be a negotiating place which is negotiated away by one aspect or the opposite. I’m way more relaxed about it than I’d have been two years in the past, really.”
JLR has now furloughed round 50% (20,000) of its non-critical staff in the course of the coronavirus disaster, though it’s paying 100% of their salaries this month. Board-ranking executives have deferred their wage funds for 3 months, with CEO Ralf Speth’s pay being diminished by 30%.
The pandemic has had a major impact on already-falling gross sales, too. The newest figures for the 2019/2020 monetary 12 months reveal JLR offered 508,659 autos, down 12.1% on the identical interval the 12 months earlier than. A extra vital dent was made within the final monetary quarter, between January and March, with gross sales down 30.9% 12 months on 12 months to 108,869.
The figures fluctuate between manufacturers. Jaguar’s gross sales took a selected hammering, down 22% total within the 12 months and 42.6% within the final quarter, at 28,288. Land Rover, by comparability, was down 7.7% and 25.6% respectively, promoting 81,581 automobiles within the final quarter.