Why Jaguar Land Rover has changed its tune over Brexit

New models have boosted UK sales in recent
months, but questions remain over the impact of cross-border
checks

In Depth

Over the past two years, the British carmaker has repeatedly
warned that a no-deal Brexit could result in tariffs for vehicles
exported to the Continent, jeopardising the company’s profit
margins and putting jobs at risk. 

But in a drastic change of tone, the company’s UK managing
director, Rawdon Glover, told Autocar that both Jaguar and Land Rover brands
have “shown upswings” despite market uncertainty brought on by
inconclusive Brexit negotiations. 

“There is so much uncertainty and all the indicators
suggest consumer confidence is down, so there is reasonable cause
to look to those concerns as a reason for depressing the car
market,” he told the motoring magazine. 

“So, thinking positively, you could say that any
resolution to the Brexit impasse could help us emerge into a more
favourable mindset, possibly even with pricing advantages for
anyone building their cars in Britain,” he said. 

“It’s a one-sided view,” said Glover, “but my job is to
sell Jaguars and Land Rovers in the UK, and I can look therefore at
potential upsides to us emerging from Brexit, hopefully with a
clear vision for the future that gives people
confidence.”

Why the change of heart, JLR?

There seem to be a few key factors behind the company’s
apparent shift on Brexit.

Most of the warnings issued by JLR have come from its chief
executive, Ralf Speth. In September, for instance, Speth told
Sky News that the company’s 3,000 cars per day
production line relied heavily on “just-in-time” supply lines,
which may become disrupted if extra border checks were
introduced.

“Just one part missing could mean stopping production at a
cost of £60m a day. That is a huge risk,” he told the
broadcaster. 

Glover’s comments, however, are in regards to the sales of
JLR vehicles. In April, the company reported that year-on-year
sales had grown in the UK by 12.1%, suggesting that Brexit hasn’t
deterred motorists from buying new cars. 

This is partly due to the release of the new Range Rover
Evoque (pictured top), says JLR, as well as the continuing success
of the all-electric Jaguar I-Pace. 

JLR also has a number of new models in the works,
including the Land Rover Defender and a rumoured all-electric
version of its XJ saloon – both of which are expected to be popular
with buyers.

But the company saw massive declines of 45.7% in China.
Overseas markets also plummeted by 22.3%, while European sales
dropped by 5.5%. 

It remains to be seen whether strong UK sales will be
enough to cover the ground lost in other key
markets. 

Is the industry still concerned about Brexit?

Yes. While JLR appears to be less concerned about
Britain’s divorce from the EU than it has been, other figures in
the industry still fear a no-deal Brexit.

Yesterday, French motoring giant PSA revealed that it would
continue to manufacture the Vauxhall Astra in the UK only if a deal
with the EU can be reached before Brexit, the Financial Times reports. 

Vauxhall’s Ellesmere Port factory in Cheshire “is heavily
reliant on access to Europe”, the newspaper says. Around 80% of
cars made there are exported to the Continent, meaning any border
checks or tariffs imposed in the event of a no-deal Brexit could
“severely hurt” business.

The Society of Motor Manufacturers and Traders (SMMT)
frequently raises concerns over Brexit’s impact on the industry,
too. 

As reported by Reuters, an SMMT spokesperson said that
“leaving the EU without a deal would trigger the most seismic shift
in trading conditions ever experienced by automotive, with billions
of pounds of tariffs threatening to impact consumer choice and
affordability”.