London: Jaguar Land Rover (JLR) will “realign its thinking” on investment after Britain’s vote to leave the EU and if Nissan gets a Brexit compensation deal then other carmakers would need a level playing field, Britain’s biggest carmaker said.
Chief executive Ralf Speth also said yesterday that there were signs that some customers in Europe, Jaguar Land Rover’s biggest market, no longer wanted to buy British cars.
Speth responded to comments by Nissan chief executive Carlos Ghosn, who said on Thursday he would halt new investment in Britain without a pledge of compensation for tariffs imposed on UK-built cars in the event of a ‘hard Brexit’.
“We are the only car manufacturer in the UK to do all the work in terms of research, design, engineering, production planning in the UK,” Speth said.
“We want to have fair treatment and a level playing field at the end of the day,” he said by telephone from the Paris car show.
Britain is not expected to begin formal divorce talks from the European Union until 2017, which will last two years, but there are growing concerns among carmakers about the implications of a ‘hard Brexit’, which would leave firms paying tariffs to export UK-assembled cars to EU markets.
Carmakers Nissan and Toyota both warned on Thursday that tariffs could hurt production in Britain and Volkswagen-owned brand Skoda urged Britain, Europe’s second-largest car market, to clarify the situation as soon as possible.
Speth said JLR, which built one third of Britain’s 1.6 million cars last year, would face a double hit in the event of ‘hard Brexit’ with tariffs on exported cars and imported parts and technology hurting competitiveness.
“If we face higher tariffs than anybody else then it’s quite clear that it’s reducing the competitiveness of our products especially in Europe,” he said. “The order of magnitude cannot be calculated right now.”
Speth also raised concern that some European consumers might be shunning British brands in the wake of the Brexit vote, referring to comments by European sales representatives.
JLR said its long-term investment strategy has not changed as a result of the vote but the firm would now have to think again after Britons backed leaving the European Union on June 23.
More than 800,000 jobs depend on Britain’s overwhelmingly foreign-owned car industry and big carmakers backed continued membership during the campaign, seeing benefits from open trade and standardised rules.
Britain’s car industry body the Society of Motor Manufacturers and Traders warned yesterday that a lack of clarity over a potential deal risked future growth.