According to Khabar Khodro, Jaguar
Land Rover’s chief financial officer has admitted that if the UK "crashes out”
of the EU with no deal, it would cost the firm £500 million per year in tariffs
on vehicle exports alone.
Autocar found the remarks in a record of a meeting
between Adrian Mardell and investment banks at the end of January. Mardell said
he "fully expects” the current transition period to last until 1 January 2021,
after which there will be "a different relationship”.
Mardell also said: "We’ve gone through two versions of
potential crash-outs already, in the end of March  and the end of
October, and what we did was to protect ourselves by closing the plant for a
"We’ll decide at the back end of this calendar year
whether that’s an appropriate measure. If we do crash out, if we go to WTO
[World Trade Organization rules]… it’s about a £500m duty hit – £40m a month.”
It’s rare for a senior figure at a major car maker to
quantify the cost of a no-deal Brexit and resultant use of WTO rules. But
Mardell also reckons that if the UK does find itself in this situation, it
won’t be for long.
"I don’t personally believe that we’d really be at those
WTO levels for a significant period of time,” he said. "I think it would be a
negotiating position which is negotiated away by one side or the other. I’m
much more relaxed about it than I would have been two years ago, actually.”
JLR has now furloughed around 50% (20,000) of its
non-critical workers during the coronavirus crisis, although it’s paying 100%
of their salaries this month. Board-ranking executives have deferred their
salary payments for three months, with CEO Ralf Speth’s pay being reduced by
The pandemic has had a significant effect on
already-falling sales, too. The latest figures for the 2019/2020 financial year
reveal JLR sold 508,659 vehicles, down 12.1% on the same period the year
before. A more significant dent was made in the last financial quarter, between
January and March, with sales down 30.9% year on year to 108,869.
The figures vary between brands. Jaguar’s sales took a
particular hammering, down 22% overall in the year and 42.6% in the last
quarter, at 28,288. Land Rover, by comparison, was down 7.7% and 25.6%
respectively, selling 81,581 cars in the last quarter.