JLR asks for clarity on post-Brexit trade

Jaguar Land Rover (JLR) has asked the UK government for clarity on the taxes post the country exiting the European Union (EU). The Brexit vote took place on 23 June 2016, while the exit date has been fixed as 29 March 2019. Free trade and uniform market conditions will no longer apply post this date for businesses in the UK.

JLR operates 3 vehicle and 1 engine assembly plants in the UK and employs over 40,000 people in various divisions. 33% of the total cars exported from the country are JLR vehicles. The company also revealed that 40% of all parts are imported from Europe. JLR and many of its suppliers would face an uncertain future if the Brexit move doesn’t maintain free trade between EU countries and the UK.

In 2016, construction of a vehicle plant in Slovakia began. The plant, which is expected to begin production later in 2018, is designed to build aluminium JLR vehicles. Due to the uncertain tariffs, the company could focus investment on the Slovakia plant and shift some production out of the UK to cater to the markets in EU.

As of now, EU rules allow free trade across the member countries. A common tax is imposed on all goods entering the area. Once UK leaves the EU, trade with countries in the other parts of Europe will need separate trade agreements and is expected to cause difficulty when compared to the earlier free trade policy.