Last week’s historic Brexit vote looks set to have lasting implications for the UK motor industry, not least its largest and most important domestic manufacturer, Jaguar Land Rover. According to a former consultant to the company, the company is going to have to re-evaluate its range, with regards to the fuel consumption and emissions output and their standing in important export markets.
Jaguar Land Rover was the main beneficiary of a special agreement negotiated by UK officials that relaxed the carbon dioxide targets set for heavier cars by 2021. It has been suggested that the EU could overturn the exemption, leaving Jaguar Land Rover frantically looking to improve the efficiency of its range of primarily luxury cars. The former consultant told AROnline, ‘When I was working for JLR, I learned of a special EU exemption based on its volume,’ he said.
‘I have to think this may force Jaguar Land Rover’s hand and make them do one of two things in a hurry: (1) hybridize everything, or (2) launch a few smaller vehicles to rebalance the range away from the luxury end of the market.’ Company insiders had already said that a Brexit vote could cost as much a £1bn thanks to a decline in earnings and profits related to corrected exchange rates and weaker sterling.
Jaguar Land Rover is working hard on both hybrid diesel drivertrains, as well as all-electric solutions, and cars powered by the former options are well on track to get into production before 2021. However, there are concerns that its development timetable may be forced to change if the EU hastens the end of this exemption, given its haste in wanting the UK out of the Union.
According to a report by Automotive News, there would be few reasons to maintain the agreement. ‘Once the UK is outside the EU, why wouldn’t the French and Germans get rid of that amendment? There would be no one left inside the EU benefiting from that,’ John Leech, head of the UK automotive practice at accounting firm KPMG.
Jaguar Land Rover issued a statement following the referendum, stating, ‘we are a British business with a strong manufacturing base in this country, we call Britain home and we remain committed to all our manufacturing sites and investment decisions. We respect the decision of the British people and in common with all other businesses, JLR will analyse the issues arising from it – as of today, nothing has changed for us or the rest of the British automotive industry.’
The statement also said, ‘we will work hard with all parties to ensure that the importance of the British automotive industry is fully understood at every level of the negotiation process.’