The coming days will not be smooth sailing for automakers as most of the voters have voted in favor of Brexit – British exit from the European Union. This means that the British and European leaders will be negotiating the terms of Britain’s departure. Owing to the situation, automakers have decided to be more cautious when it comes to making decisions involving a new product or redesigning a vehicle model in the UK.
Britain’s largest carmaker Jaguar Land Rover (JLR) has been in Britain for three decades and makes 4, 75,000 cars a year in the country of which most of them are exported inside the European Union and beyond. Tata Motors owned JLR estimates that their annual profit could be cut by one billion pounds ($1.47 billion) by 2020. Raising concerns, Nissan and BMW have also stated that the Brexit will have an effect on their car exports to the European Union which is a destination for more than half of their cars which are produced in Britain.
Toyota states that due to Brexit, duties under the new trading deals can cost an addition of 10 per cent as against the free tariffs and duties which were applicable earlier on exports from Britain to the European Union. The company believes that the new policy will hit either prices or margins, denting their sales numbers. Toyota has produced about 1,90,000 cars in Britain last year. Of that, 75 per cent went to the European Union. Of which only 10 per cent was shipped and sold within Britain.
