Jaguar Land Rover (JLR) made clear on Thursday that a Brexit deal without a customs union partnership or access to the single market would erode the company’s profitability by €1,4bn a year.
“A Brexit which increases bureaucracy, reduces productivity and competitiveness of the UK Industry is in no-one’s interest,” the company said in a statement.
The biggest car manufacturer in the UK announced in June that it would be shifting part of its production to the city of Nitra in Slovakia.
Jaguar will add 1,400 people to its workforce in Slovakia and scale up its production by 300,000 vehicles a year. In 2017 JLR produced 530,000 cars in the UK, of which 20% was exported to Europe.
The company is now joining the ranks of Airbus, BMW, Siemens, and Nissan calling for frictionless trade with the EU.
Currently, Tata group employ 40,000 people in the UK, supporting an additional 260,000 jobs across their production line in steel and car manufacturing.
Jaguar Landrover (JKR) is central to the Indian parent company’s profitability, contributing up to 77% of its total revenue. Tata group has invested £50bn in the UK economy over the last five years and is committed to investing another £80bn over the next five years. However, this investment is in jeopardy if the right customs union is not in place the company warns.
In the meantime, Tata group is producing its first electric vehicle I-Pace in Austria.
The company has been planning to produce its new range of electrically powered vehicles in Solihul, UK, if it is able to access the Single Market.
Challenged with the JKL’s warning, the UK’s business minister Greg Clark said the government was seeking a solution which worked for business. Later on Friday, Theresa May is to announce a new proposal on the UK’s trade partnership with the EU.
The UK government has yet to outline its future industrial strategy, as it is unclear whether it seeks “reshore” production, breaking away from European value chains, or ensure continuity.