Things are not going in favor of Land Rover, as it seems
In the aftermath of the UK’s Brexit referendum, numerous uncertainties have raised their heads which have caught the attention of many. A significant drop in the value of the British pound has brought instantaneous effects on almost every field including imports and exports and the auto industry is no exception.
In fact, the automotive market in the UK has suffered a hard-hit. This effect has influenced the investments adversely and has erected trade barriers and tariffs. This, in turn, leading to the shutting down of plants. All the British automakers are in troubled waters and the Jaguar Land Rover is one of them.
Jaguar Land Rover
The Jaguar Land Rover is one of the most illustrious automobile manufacturer of executive vehicles worldwide.
The expertise of this UK based automaker in manufacturing four-wheel-drive vehicles is unquestionable. The Jaguar Land Rover has a reputation of fashioning luxurious and executive vehicles which are second to none in terms of their appeal and stature.
A formal warning by the auto-giant
Being conscious about how things are unfolding, a document containing dire warnings has been submitted to US financial regulator, Securities and Exchange Commission, by the Land Rover. According to the reports by ITV Central News, this document is based on the consequences that Land Rover is expecting due to Brexit.
It is said that the Jaguar Land Rover thinks that being a British company, it will not be able to compete effectively in the international automotive industry if the UK walks out of the single market without striking a good trade deal.
Moreover, the company’s pension shortfall has amplified from £0.5 billion to a staggering £1.46 billion, thanks to the toppled investments under Brexit pressure.
What consequences do the company fear?
It is also reported that the firm has formally requested the concerned authorities repeatedly that in case UK leaves the EU, the company UK government should not impose tariffs on car parts imports or exports.
From a neutral point of view, Land Rover is very much true in its concerns because Brexit is set to garner its competitors in Europe a huge competitive advantage. Without striking appropriate trade deals, the company would be in shambles and can go bankrupt. But if in a case, you need a used or reconditioned Jaguar engine, it can be easily available in the market.
No more jewel in the crown of British auto industry?
Land Rover has a widespread recognition all over the world and is rightly called the jewel in the crown of British manufacturing. However, as the events occurring, the jewel seems to be facing tough times and a potential economic storm is heading its way. Therefore, if concerned authorities do not take these uncertainties serious, the consequences can be terrible.
Addressing to such state of affairs, the Member of Parliament Jack Dromey commented: “Hundreds of thousands of workers may now pay the price with their jobs. Jaguar Land Rover has done everything possible to engage with the Government and has been very reluctant to speak out but increasingly they are despairing of the direction of travel of the Government.”
Hard Brexit could cost Jaguar Land Rover £1.2B
Jaguar Land Rover is the UK’s largest car manufacturer, yet it is deep uncertainty and jobs of thousands of people are at risk. The exit of the UK from EU single market would mean Jaguar Land Rover have to pay £1.2 billion every year under the bracket of tariffs.
This is a massively huge sum and can potentially collapse the financial base of the company. A return towards certainty would be the ideal condition for the company in order to revitalize the productions along with providing job security to the employees. UK government needs to take action before it is too late.