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You can find the current article at its original source at https://www.theguardian.com/business/live/2018/jul/05/tata-motors-jaguar-land-rover-brexit-mark-carney-car-sales-business-live
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| Tata Motors shares hit five-year low after hard Brexit warning - business live | Tata Motors shares hit five-year low after hard Brexit warning - business live |
| (35 minutes later) | |
| Conservative MP Owen Paterson thinks Jaguar Land Rover are wrong to worry about a hard Brexit. | |
| Paterson, a Brexit supporter, told Radio 4’s Today programme that JLR would be in a “wonderful position” once Britain has left the single market and the customs union. | |
| Paterson argues that it’s wrong to assume that tariffs would be imposed on goods travelling into the UK from Europe. | |
| He points out: | |
| “If we go to WTO terms, we set our tariffs and we can choose to have no tariffs.” | |
| He added out that JLR was enjoying strong sales in China - why shouldn’t that continue after Brexit? | |
| I think there’s a few problems with this view, though. | |
| Wirral West Labour MP Alison McGovern says the government must heed JLR’s warning that a hard Brexit could wipe out its UK profits. | |
| She says: | |
| “Ahead of Friday’s behind-closed-doors Brexit summit at Chequers, the news that Jaguar Land Rover says a hard Brexit outside the Single Market and the Customs Union would make it impossible for them to remain profitable in the UK should send shockwaves through the political establishment. | |
| .@Alison_McGovern – Jaguar Land Rover announcement “should send shockwaves through the political establishment” https://t.co/dvG88tM0Yz pic.twitter.com/9lwadfTdp4 | |
| Newsflash: UK car sales fell by 3.5% in June, as drivers continue to shun diesel motors. | Newsflash: UK car sales fell by 3.5% in June, as drivers continue to shun diesel motors. |
| Some 234,945 new cars were registered across Britain last month, the Society for Motor Manufacturers and Traders reports. | Some 234,945 new cars were registered across Britain last month, the Society for Motor Manufacturers and Traders reports. |
| That’s down from 243,454 a year ago, and ends a two-month run of rising sales. | That’s down from 243,454 a year ago, and ends a two-month run of rising sales. |
| In total, UK car sales in 2018 are down 6.3% so far this year, following declines in the first quarter of 2018. | In total, UK car sales in 2018 are down 6.3% so far this year, following declines in the first quarter of 2018. |
| Sales of diesel cars slumped by 28%, as the emissions-testing scandal continues to hit demand. Petrol sales rose 12%, while electric vehicles sales jumped 45% (but at 15,549, that’s only 6.6% of the market). | Sales of diesel cars slumped by 28%, as the emissions-testing scandal continues to hit demand. Petrol sales rose 12%, while electric vehicles sales jumped 45% (but at 15,549, that’s only 6.6% of the market). |
| The SMMT blames the slump in diesel sales on “continuing consumer uncertainty over future policy towards this technology”. Some cities are already moving towards ‘clean air’ zones in which more polluting vehicles are banned. | The SMMT blames the slump in diesel sales on “continuing consumer uncertainty over future policy towards this technology”. Some cities are already moving towards ‘clean air’ zones in which more polluting vehicles are banned. |
| The West Midlands and Liverpool could be badly hit if Jaguar Land Rover cuts investment in the UK or moves production overseas because of Brexit. | The West Midlands and Liverpool could be badly hit if Jaguar Land Rover cuts investment in the UK or moves production overseas because of Brexit. |
| The company runs several manufacturing plants in Britain - which have benefitted from billions of pounds in investment since bought JLR a decade ago. | The company runs several manufacturing plants in Britain - which have benefitted from billions of pounds in investment since bought JLR a decade ago. |
| Solihull, Birmingham: More than 6,000 people work here, producing Defender, Discovery, Range Rover and Range Rover Sport models. | Solihull, Birmingham: More than 6,000 people work here, producing Defender, Discovery, Range Rover and Range Rover Sport models. |
| Castle Bromwich, Birmingham: 3,200 staff produce Jaguar models, including the F-TYPE, XJ, XF and XK | Castle Bromwich, Birmingham: 3,200 staff produce Jaguar models, including the F-TYPE, XJ, XF and XK |
| Gaydon, Coventry: Land Rover design team are based at this engineering site, using virtual-reality technology, wind tunnels, CAD systems and a test tracks to develop new models | Gaydon, Coventry: Land Rover design team are based at this engineering site, using virtual-reality technology, wind tunnels, CAD systems and a test tracks to develop new models |
| Halewood, Liverpool: More than 4,00 people work at this 300-acre site, producing the Range Rover Evoque and the Land Rover Discovery Sport. | Halewood, Liverpool: More than 4,00 people work at this 300-acre site, producing the Range Rover Evoque and the Land Rover Discovery Sport. |
| Whitley, Coventry: JLR’s global headquarters is based here, along with Jaguar Design and Jaguar Land Rover’s corporate staff. | Whitley, Coventry: JLR’s global headquarters is based here, along with Jaguar Design and Jaguar Land Rover’s corporate staff. |
| Wolverhampton: Almost 1,400 people work at JLR’s new Engine Manufacturing Centre, which the company proudly calls “one of the most cutting-edge facilities of its kind in the UK”.It produces low-emission 4-cylinder Jaguar Land Rover petrol and diesel engines, and is a key part of the company’s expansion strategy in recent years. | Wolverhampton: Almost 1,400 people work at JLR’s new Engine Manufacturing Centre, which the company proudly calls “one of the most cutting-edge facilities of its kind in the UK”.It produces low-emission 4-cylinder Jaguar Land Rover petrol and diesel engines, and is a key part of the company’s expansion strategy in recent years. |
| Union leaders are urging the government to heed Jaguar Land Rover’s warning, rather than play ‘Russian roulette’ with UK jobs. | Union leaders are urging the government to heed Jaguar Land Rover’s warning, rather than play ‘Russian roulette’ with UK jobs. |
| Len McCluskey, general secretary of Unite, says Theresa May must heed the concerns being voiced by British business leaders, who fear new trade barriers with Europe. | Len McCluskey, general secretary of Unite, says Theresa May must heed the concerns being voiced by British business leaders, who fear new trade barriers with Europe. |
| McCluskey says: | McCluskey says: |
| “Tens of thousands of decent jobs - the sort we will need more than ever outwith the EU - are being put at risk by a Government that places its survival, indulging narrow, extremist views, above the well-being of the people of this country. This is simply not acceptable. | “Tens of thousands of decent jobs - the sort we will need more than ever outwith the EU - are being put at risk by a Government that places its survival, indulging narrow, extremist views, above the well-being of the people of this country. This is simply not acceptable. |
| “So I say this to the Tory party, our jobs are not yours to play Russian roulette with. Drop your red lines and secure a decent deal, one that is to the benefit of the working people of this country. | “So I say this to the Tory party, our jobs are not yours to play Russian roulette with. Drop your red lines and secure a decent deal, one that is to the benefit of the working people of this country. |
| “And if you cannot agree to put people before your ideology then move over and let a party that will get on with it.” | “And if you cannot agree to put people before your ideology then move over and let a party that will get on with it.” |
| Earlier this week, Unite said it would push for an early general election if it wasn’t satisfied with the government’s Brexit deal. | Earlier this week, Unite said it would push for an early general election if it wasn’t satisfied with the government’s Brexit deal. |
| PB Balaji, chief financial officer at Tata Motors Group, has also weighed in, warning against new trade barriers with Europe. | PB Balaji, chief financial officer at Tata Motors Group, has also weighed in, warning against new trade barriers with Europe. |
| Echoing JLR’s statement, Balaji declares that it’s in “no-one’s interests” to end up with a Brexit which increases bureaucracy and reduces the productivity and competitiveness of the UK Industry. | Echoing JLR’s statement, Balaji declares that it’s in “no-one’s interests” to end up with a Brexit which increases bureaucracy and reduces the productivity and competitiveness of the UK Industry. |
| Balaji adds: | Balaji adds: |
| “Jaguar Land Rover and Tata Motors have always maintained that the uncertainties from Brexit are avoidable and the business seeks clarity to ensure that industry takes timely and right decisions to manage the transition. | “Jaguar Land Rover and Tata Motors have always maintained that the uncertainties from Brexit are avoidable and the business seeks clarity to ensure that industry takes timely and right decisions to manage the transition. |
| Additionally, Jaguar Land Rover needs free and full access to the single market beyond transition to remain competitive which we also firmly believe is in the best long term interests of the United Kingdom. | Additionally, Jaguar Land Rover needs free and full access to the single market beyond transition to remain competitive which we also firmly believe is in the best long term interests of the United Kingdom. |
| Shares in Jaguar Land Rover’s parent company have hit a five-year low, after it warned that a hard Brexit could drive it out of the UK. | Shares in Jaguar Land Rover’s parent company have hit a five-year low, after it warned that a hard Brexit could drive it out of the UK. |
| Tata Motors slide by over 4% in early trading in Mumbai, as investors worry about the impact of Brexit on its business. | Tata Motors slide by over 4% in early trading in Mumbai, as investors worry about the impact of Brexit on its business. |
| Tata’s shares have now lost half their value since September 2016, as Brexit stormclouds have gathered. | Tata’s shares have now lost half their value since September 2016, as Brexit stormclouds have gathered. |
| As Britain’s largest car maker, Jaguar Land Rover Automotive is a crucial part of Tata Motors. JLR posted reported pre-tax profits of £1.5bn in the last financial year - partly due to stronger sales to China and the US. | As Britain’s largest car maker, Jaguar Land Rover Automotive is a crucial part of Tata Motors. JLR posted reported pre-tax profits of £1.5bn in the last financial year - partly due to stronger sales to China and the US. |
| Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business. | Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business. |
| Britain’s largest carmaker has added its voice to the chorus of businesses warning against a hard Brexit, as negotiations with the EU (and within the cabinet) heat up. | Britain’s largest carmaker has added its voice to the chorus of businesses warning against a hard Brexit, as negotiations with the EU (and within the cabinet) heat up. |
| Jaguar Land Rover piled fresh pressure on the government by warning that tens of thousands of jobs are at risk, if new trade tariffs with Europe are imposed after Brexit. | Jaguar Land Rover piled fresh pressure on the government by warning that tens of thousands of jobs are at risk, if new trade tariffs with Europe are imposed after Brexit. |
| The news has knocked shares in parent company Tata Motors, and sent another shiver through Britain’s increasingly nervous auto industry. | The news has knocked shares in parent company Tata Motors, and sent another shiver through Britain’s increasingly nervous auto industry. |
| CEO Ralf Speth quantified the impact, warning that a bad Brexit deal would wipe out more than £1.2bn of profits each year - making new investment simply impractical. | CEO Ralf Speth quantified the impact, warning that a bad Brexit deal would wipe out more than £1.2bn of profits each year - making new investment simply impractical. |
| Speth declared: | Speth declared: |
| “As a result, we would have to drastically adjust our spending profile – we have spent around £50bn in the UK in the past five years, with plans for a further £80bn more in the next five. This would be in jeopardy should we be faced with the wrong outcome.” | “As a result, we would have to drastically adjust our spending profile – we have spent around £50bn in the UK in the past five years, with plans for a further £80bn more in the next five. This would be in jeopardy should we be faced with the wrong outcome.” |
| JLR (like many other businesses) needs free and frictionless trade with the EU and unrestricted access to the single market, Speth explained. | JLR (like many other businesses) needs free and frictionless trade with the EU and unrestricted access to the single market, Speth explained. |
| The warning is deeply alarming for JLR’s 40,000 staff, as the company’s entire future in Britain could be at risk. | The warning is deeply alarming for JLR’s 40,000 staff, as the company’s entire future in Britain could be at risk. |
| As Speth put it (via the FT) | As Speth put it (via the FT) |
| “If I’m forced to go out because we don’t have the right deal, then we have to close plants here in the UK and it will be very, very sad. This is hypothetical, and I hope it’s an option we never have to go for.” | “If I’m forced to go out because we don’t have the right deal, then we have to close plants here in the UK and it will be very, very sad. This is hypothetical, and I hope it’s an option we never have to go for.” |
| This intervention comes a day before cabinet ministers meet to discuss Brexit. Theresa May is pushing a ‘third way’ customs agreement, where the UK tracking goods as they come into the country, and levying EU import taxes on them only if their final destination is inside the EU. | This intervention comes a day before cabinet ministers meet to discuss Brexit. Theresa May is pushing a ‘third way’ customs agreement, where the UK tracking goods as they come into the country, and levying EU import taxes on them only if their final destination is inside the EU. |
| That might address some of businesses’ concerns, but hard-line Brexiteers might argue it’s not a clean break with the EU (who might reject the idea anyway). | That might address some of businesses’ concerns, but hard-line Brexiteers might argue it’s not a clean break with the EU (who might reject the idea anyway). |
| Also coming up today: | Also coming up today: |
| Bank of England governor Mark Carney is speaking at a major business summit in Newcastle. He’ll be discussing the Northern Powerhouse scheme - City traders will be listening for hints about an August interest rate rise too. | Bank of England governor Mark Carney is speaking at a major business summit in Newcastle. He’ll be discussing the Northern Powerhouse scheme - City traders will be listening for hints about an August interest rate rise too. |
| June’s UK car registration data are released this morning too - they may show sales rose for the third month running. | June’s UK car registration data are released this morning too - they may show sales rose for the third month running. |
| The agenda | The agenda |
| 9am SMMT car sales for June & first half of 2018 | 9am SMMT car sales for June & first half of 2018 |
| 10.45am: Mark Carney speaks at the Great Exhibition of the North in Newcastle | 10.45am: Mark Carney speaks at the Great Exhibition of the North in Newcastle |
| 3pm BST: US service sector PMIs for June | 3pm BST: US service sector PMIs for June |