Jaguar Land Rover predicts RM2.7 billion in parts import tariffs p.a. in event of no-deal Brexit – report

British automaker Jaguar Land Rover (JLR) would have to fork out an additional £500 million (RM2.7 billion) in parts import tariffs alone, should the United Kingdom leave the European Union with no deal, chief financial officer Adrian Mardell was reported as saying by Autocar.

The remarks made by Mardell were discovered from records of a meeting between the CFO and investment banks back in January, where Mardell said he ‘fully expects’ the transition period to last until January 1, 2021, after which there will be a ‘different relationship’.

“We’ve gone through two versions of potential crash-outs already, in the end of March 2019 and at the end of October, and what we did was to protect ourselves by closing the plant for a week. We will decide at the back end of this calendar year whether that’s an appropriate measure. If we do crash out (of the EU), if we go to WTO (World Trade Organisation) rules, it will be about a £500m duty hit, or £40m (RM213 million) a month,” said Mardell.

That said, should the United Kingdom find itself in this position, it would not remain so for long, said Mardell. “I don’t personally believe that we’d really be at those WTO levels for a significant period of time. I think it would be a negotiating position which is negotiated away by one side or the other,” he said.

Jaguar Land Rover has furloughed around half, or 20,000 of its non-critical workers during the Covid-19 crisis, although the firm is paying their salaries in full this month, the magazine reported. Meanwhile, board-ranking executives have deferred their salary payments for three months, while CEO Ralf Speth has taken a 30% pay cut.

Latest figures show that JLR sold 508,659 vehicles for the 2019-2020 financial year, representing a 12.1% drop from the same period a year prior. The last financial quarter between Janurary and March saw a 30.9% drop year-on-year to 108,869 units, Autocar reported.

Jaguar suffered more than Land Rover in this time, the former charting a 22% drop overall for the year and down 42.6% to sell 28,288 units in the last quarter, while Land Rover recorded a 7.7% dip overall for the year and down 25.6% for a total of 81,581 units sold in the last quarter.

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