Home / Auto / Brexit uncertainty clouds Jaguar Land Rover’s recovery

Mumbai: Protracted Brexit talks are weighing on the recovery prospects of Tata Motors Ltd’s Jaguar Land Rover Plc (JLR), the carmaker that is already under pressure to keep up as the global automobile industry moves toward electrification and automation, according to its Indian owner.

The focus of Tata Motors, which bought the maker of the iconic British marquees in 2008, is to ensure Jaguar Land Rover remains financially strong in the face of the challenges, Tata Sons chairman Natarajan Chandrasekaran said in an interview over the weekend. Tata Sons is the parent of Tata Motors.

“For them, because they are in the UK, they don’t know what the outcome of Brexit is and results of trade agreements are going to be," Chandrasekaran told Bloomberg Television’s Amanda Lang in Canada. “So there are three or four things, all happening at the same time, so they are having to deal with all of this."

After reporting a loss of £210 million ($271 million) in the quarter through June, JLR warned the UK government that failing to secure a good deal over the terms of UK’s departure from the European Union would wipe out billions from its coffers and hobble its operations. David Lidington, the de facto British deputy prime minister, said last week that an agreement is 85% complete, with the Northern Ireland border the main outstanding issue.

A “bad Brexit" would jeopardize as much as £80 billion in spending by Jaguar Land Rover over the next five years, chief executive officer Ralf Speth has cautioned, adding extra costs and delays in parts deliveries coming from outside the UK would cut profit by £1.2 billion a year.

JLR has also seen demand for its vehicles in Europe wane amid uncertainty over diesel vehicles and additional taxes on the fuel in the UK.

“We want to make it financially stronger," Chandrasekaran said, without elaborating. “We believe in that company."

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