COVENTRY, ENGLAND -- Jaguar Land Rover CEO Ralf Speth says he “regrets” the political process that lead to the UK's exit from the EU, indicating that the British people weren't properly informed about the consequences of the so-called Brexit.
JLR is the UK's biggest vehicle manufacturer, which leaves it vulnerable to the upheaval resulting from the UK splitting from its biggest trading partner.
Speth said that simply asking people to vote “in” or “out” was the wrong approach.
“I regret that the whole Brexit discussion was a one-time arrangement,” Speth told Automotive News Europe, adding that he felt the process didn't give voters a “complete indication” of the magnitude of leaving the EU.
Speth said that the outcome didn't affect JLR's investment plans in the country, where it has three vehicle production plants. “Britain may have voted to leave, but at JLR our strategy endures,” he said at the unveiling of a new vehicle simulator at the JLR-supported Warwick Manufacturing Group on Thursday.
However, the split could halt any plans JLR had to relieve local capacity constraints by building a fourth UK factory, which has been reported by the UK media but not confirmed. Industry watchers believe Brexit will force those plans to be shelved.
“That must be out of the window now, unless there's a substantial reason,” Ian Fletcher, principal analyst at IHS Automotive told Automotive News Europe. “I can't see that in the near-to-medium term.” He added that the Brexit could accelerate JLR's plans to add a plant elsewhere, possibly in North America.
ACEA membership safe
JLR is building a new 1 billion pounds plant in Slovakia that is due to open in 2018. That addition will allow JLR to retain its membership in the European carmakers association, ACEA, said Erik Jonnaert, who is the organization's secretary general. With a factory in Slovakia JLR also retains a manufacturing presence in the EU. “They managed to hedge themselves a bit there, which is a bit fortuitous,” Fletcher said. “It always been part of their plan to be less focused in the UK.”
JLR estimated its annual profit could be cut by 1 billion pounds ($1.33 billion) by the end of the decade as a result of the Brexit, Reuters quoted sources close to the company as saying before last week's vote.
JLR sells about 20 percent of its cars in Europe, the company said. The UK will now negotiate with the EU to decide whether UK-built cars will be hit with a 10 percent import tariff.
Speth said it was difficult to speculate what will happen at this early stage. “It is very complex decision both for the UK and the Europe with far more implications than you [could imagine],” he said. “We have seen the currency [depreciation]. We have seen the Standard & Poor's downgrade [of the UK's credit rating]. What else is next?”