Jaguar Land Rover is waiting for more information on trading conditions after Brexit before it decides whether to make electric cars in its home market, the boss of the UK’s biggest carmaker has said.
The Indian-owned car maker, which makes just under one in three of the UK’s 1.7 million cars at three factories, is building its new I-Pace electric model in Austria.
The company is due to decide this year whether to build electric vehicles in the UK but, like its peers, is worried about the imposition of tariffs or customs checks after Brexit, snarling up supply chains and adding costs to production.
“That makes the decision this year very, very critical and I don’t know whether we can make it,” chief executive Ralf Speth said at the Geneva Motor Show.
London and Brussels hope to agree on a transitional deal this month to maintain free and unfettered trade until at least the end of 2020 ahead of a long-term Brexit agreement to be decided by the end of the year.
Speth cited the need for support from government and academia but when asked whether Brexit was a factor in the decision- making process, he said:
“We are waiting for these kinds of decisions. It goes without saying because uncertainty is really challenging us very much and not only us, it’s for the complete industry.
“You hardly see inward investment anymore or every decision is taking longer from every faculty. Therefore it would be ... appropriate to get more information about these kinds of deals,” he said.
Last week, Toyota said it will keep its plant in the UK as the sole European producer of its Auris hatchback in a bet the UK can remain competitive after it negotiates an exit from the EU. The world’s second-biggest car manufacturer will make the third-generation Auris at its Burnaston factory near Derby, powered by engines from the Deeside facility in Wales.
The decision, which safeguards about 3,000 jobs, comes as a boost for the UK industry as uncertainty over terms of the Brexit settlement causes manufacturers to review production plans.
Around 85% of Toyota’s British output is exported, so “continued free and frictionless trade between the UK and Europe will be vital for future success,” Johan van Zyl, the company’s regional president, said at the time.
The company said last year it would spend £240m (€269m) on updating equipment and technology in Burnaston. n Reuters and Bloomberg