Brexit Uncertainty Clouds Jaguar Land Rover’s Recovery
Tata wants to make JLR financially stronger said Chandrasekaran. British carmaker reported a loss of $271 million last quarter.
(Bloomberg) -- Protracted Brexit talks are weighing on the recovery prospects of Jaguar Land Rover, the carmaker that is already under pressure to keep up as the global automobile industry moves toward electrification and automation, according to its Indian owner.
The focus of Tata Motors Ltd., which bought the maker of the iconic British marquees in 2008, is to ensure Jaguar Land Rover remains financially strong in the face of the challenges, Tata Sons Ltd. Chairman Natarajan Chandrasekaran said in an interview over the weekend. Tata Sons is the parent of Tata Motors.
“For them, because they are in the U.K., they don’t know what the outcome of Brexit is and results of trade agreements are going to be," Chandrasekaran told Bloomberg Television’s Amanda Lang in Canada. “So there are three or four things, all happening at the same time, so they are having to deal with all of this."
After reporting a loss of 210 million pounds ($271 million) in the quarter through June, JLR warned the U.K. government that failing to secure a good deal over the terms of U.K.’s departure from the European Union would wipe out billions from its coffers and hobble its operations. David Lidington, the de facto British deputy prime minister, said last week that an agreement is 85 percent complete, with the Northern Ireland border the main outstanding issue.
A “bad Brexit” would jeopardize as much as 80 billion pounds in spending by Jaguar Land Rover over the next five years, Chief Executive Officer Ralf Speth has cautioned, adding extra costs and delays in parts deliveries coming from outside the U.K. would cut profit by 1.2 billion pounds a year.
JLR has also seen demand for its vehicles in Europe wane amid uncertainty over diesel vehicles and additional taxes on the fuel in the U.K.
“We want to make it financially stronger,” Chandrasekaran said, without elaborating. “We believe in that company.”
To contact the reporter on this story: P R Sanjai in Mumbai at psanjai@bloomberg.net
To contact the editors responsible for this story: Anand Krishnamoorthy at anandk@bloomberg.net, Sam Nagarajan
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