The British premium automaker, owned by India’s Tata Motors, worries its profit will severely be affected if Britain leaves EU.
The entire automotive industry in the United Kingdom will hold its breath on June 23, the day British people will vote if they still want to stay within the European Union’s boarders or not. Nearly all the automakers with manufacturing operations in the country have raised their voices against Brexit, as they claim it will seriously affect their profitability. Jaguar Land Rover become last year the biggest auto producer in UK, overpassing Nissan.
The company built more than 500,000 vehicles at its local plants in 2015 and it ended the financial year with a pre-tax profit of 1.6 billion pounds (2.35 billion dollars). According to an internal report aimed at evaluating the financial consequences of a possible exit, JLR’s profit could plunge by 1 billion pounds (1.47 billion dollars) by the end of the decade, because exports to the EU could draw a 10 percent tax, while adding a 4 percent tariff on components.
Furthermore, insiders told Reuters the company has put on hold its expansion plans. The company announced in December 2015 that it planned to invest 1 billion pounds to build a new plant in Slovakia. Media also reported earlier this year that JLR wanted to lease, on very long-term basis, the legendary British race track at Silverstone to make it the brand’s headquarter.