Tata Motors-owned British luxury car unit Jaguar Land Rover (JLR) on Friday said it will honour all its investments in the UK, and will remain committed to its European customers, even as Britain voted to leave the European Union in a historic referendum.
“For Jaguar Land Rover, today is just business as usual. We are a British business with a strong manufacturing base in this country we call home, and we remain committed to all our manufacturing sites and investment decisions,” a spokesperson said. “We respect the views of the British people and in line with all other businesses, Jaguar Land Rover will manage the long-term impact and implications of this decision: nothing will change for us, or the automotive industry, overnight.”
Europe is one of the biggest markets for JLR, accounting for a fifth of its global sales. JLR will be keen on consolidating its presence in the continent at a time when its other large market China has been grappling with industry uncertainties and recalls.
According to people familiar with Tata Motors plans for Europe, there may not be any immediate changes, but the company is, however, bracing for higher trade tariffs once Britain exits the EU, since this will make JLR less competitive compared to European rivals such as Mercedes Benz and BMW.
UK media have recently been citing an internal study by JLR, which said profits at the luxury car maker could be lower by one billion pounds from 2020, if Britain left the EU, due to a levy on vehicles exported to Europe and from taxes on import of components. Tata Motors has not commented on the issue.
For 2015-16, JLR reported a profit before tax of 1.56 billion pounds, down from 2.6 billion pounds a year ago, reflecting tough market conditions in China in the first half of last fiscal.
The company has plans to invest 3.75 billion pounds in the current fiscal, which will include expansion of global production capacity, new technologies and new vehicles, such as Jaguar F-Pace and Range Rover Evoque Convertible.
The Brexit developments came just a day after China’s quality watchdog said JLR was recalling over 11,000 vehicles in China due to faulty crankshaft sensors.
Tata Motors shares were trading down 9.3% at Rs 442.50 on the Bombay Stock Exchange on Friday. The stock hit a low of Rs 425 earlier in the session following news of the Britain referendum. It closed 7.99% down.