LONDON, July 5 — Jaguar Land Rover, Britain’s biggest carmaker, warned Theresa May’s government that a “bad Brexit” deal without “frictionless” access to the European Union would jeopardise as much as £80 billion (US$106 billion, RM430 billion) in investments over the next five years.
Extra costs and delays in parts deliveries coming from outside the UK would cut profit by £1.2 billion a year, Ralf Speth, chief executive officer of the manufacturer owned by Tata Motors Ltd, said late yesterday in an emailed statement.
“As a result, we would have to drastically adjust our spending profile,” Speth said.
The warning came on the eve of a crucial Cabinet meeting on Friday where Prime Minister May will try to find consensus on a compromise plan for the future economic relationship with the EU. It also comes less than a month after Jaguar Land Rover, based in the West Midlands, promised to retool a plant near Birmingham for a new generation of electric cars.
All UK investment is in jeopardy, a spokesman said, when asked about the plan to make electrified cars at the historic Solihull plant. The company has already said it will move production of its Land Rover Discovery to Slovakia from that location by early next year.
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Jaguar Land Rover’s is the latest automotive manufacturer to sound the alarm amid government indecision that’s increased the chances of a so-called hard Brexit. BMW AG and planemaker Airbus SE have also said they may pull investments if Brexit makes trade more difficult.
“If the UK automotive industry is to remain globally competitive and protect 300,000 jobs in Jaguar Land Rover and our supply chain, we must retain tariff and customs-free access to trade and talent with no change to current EU regulations,” Speth said.
