Jaguar hopes Britain stays in EU

Britain's former home secretary Alan Johnson said recently that there could be 14% tariff on car makers to export to EU within two years of UK's exit

As Britian prepares for a referendum on whether or not to stay in the European Union (EU), Tata Motors-owned Jaguar Land Rover (JLR) will be hoping the vote is to stay, not leave.

For, departure from the EU could mean the end of free trade agreements (FTAs). These majorly benefit the automotive industry, and JLR is the biggest vehicle maker in Britain. The country's former home minister, Alan Johnson, recently said there could be a 14 per cent tariff on car makers to export to the EU within two years of an exit.

In the past quarter, Europe, excluding Britian, accounted for 27 per cent of worldwide JLR sales or nearly 41,000 units. Their retail sales on the continent rose 55 per cent in the quarter, making it the biggest growth market for the two brands.

Ralf Speth, chief executive of JLR, said: “I hope the discussion is opening up from a one-dimensional one, the economy, to bigger questions about society, politics and movements, military issues and, last but not the least, peace. I have the opportunity to live in peace in my generation and I hope my children can also live in peace in the future. Therefore it would great for the UK (if they) can vote reasonably and I’d say stay in the Union. Then, there is nothing to change.”

JLR has hedged its expansion plans well, with plants already operational in China and India. More are due to come up in Brazil and Slovakia; a contract manufacturing agreement is in place for building vehicles in Austria.

These new plants are or will be vehicle assemblies, sourcing parts, including engine and transmission, from the mother plants in Britain. JLR is readying the launch of several models in the coming years and an exit from the EU could mean it slips into a disadvantageous position against German rivals such as Audi, BMW and Mercedes-Benz, with the onset of new tariffs.