rolls royce

Rolls Royce launches Brexit contingency plans; Jaguar Land Rover cuts 5,000 jobs

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Car manufacturer Rolls-Royce has become the latest in the sector to start stockpiling components and expanding warehouse capacity in the event of a no-deal Brexit.

The BMW-owned brand, which reported record 2018 sales, said that despite the steps it was taking to prepare for Brexit, it was impossible to predict what would happen if there is not a managed transition after March 29 2019.

“We are highly dependent on a proper, working frictionless chain of goods and this whole company hinges on just-in-time deliveries,” chief executive Torsten Mueller-Oetvoes told reporters.

“We urge the government to avoid any hard Brexit,” he said.

Aston Martin, which also makes cars in the UK made similar announcements earlier this week and has also begun stockpiling and is considering air freighting in components. 

Asked whether Rolls-Royce - which builds all of its roughly 4,000 cars per year at its Goodwood factory in southern England - would ever make some models overseas, Mueller-Oetvoes said: “This is a no-go. Rolls-Royce belongs to Britain, we are committed to Britain.”

Sales at the 115-year-old company, which employs just over 2,000 people, rose 22 percent to 4,107 cars last year, boosted by an over 40 per cent rise in demand from China, which accounted for one in five purchases.

“You see more and more self-drivers in the Chinese market, people being behind the wheel particularly over the weekends in the luxury sector and that made [current car models] Wraith and Dawn quite successful in China last year,” he said.

“I can’t comment yet on how 2019 will pan out for us in China, but so far we haven’t seen dents in our success over there.”

Fellow automaker Jaguar Land Rover, which employs around 44,000 people in the UK, is expected to announce up to 5,000 job cuts in a business update later today.

The luxury carmaker has manufacturing sites in the UK at sites in Halewood on Merseyside and Solihull, Castle Bromwich and Wolverhampton in the West Midlands.

The jobs will mostly be cut from management, marketing and administrative positions according to the BBC.

In October last year, the car giant unveiled a £2.5bn turnaround plan that included cost-cutting after Brexit uncertainty and slowing demand in China left it nursing a hefty second-quarter loss.

The firm, owned by Indian conglomerate Tata, booked a £90m pre-tax loss in the three months to September 30, which compared with a £385m profit in the same period in 2017.

In China, demand was adversely impacted by consumer uncertainty following import duty changes and escalating trade tensions with the US.

In the UK, “continuing uncertainty related to Brexit” was blamed.

JLR’s figures were also dented by the introduction of European emissions standards known as WLTP, which resulted in a fall in demand for diesel cars.

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