Today, Jaguar Land Rover (JLR) closed down its plants in the United Kingdom for five days due to Brexit. The said move adds to other shutdowns that leave at least half of the car production of the country off-line in what could be a pivotal week for the divorce of the United Kingdom from the European Union.
The move was meant to be part of the preparations at the biggest carmaker of Britain for any kind of disruption that is linked to Brexit. Today, JLR also reported a decline in the global sales of the company.
The decision was finalised a few months ago at a time when the departure date – since extended to the 12th of April- was still the 29th of March.
Automotive companies face various possible risks under a disorderly Brexit, including new customs bureaucracy, the delays to the supply of parts and finished models, the necessity to recertify cars and an up to 10 percent tariff that will be imposed on finished vehicles.
The efforts of Theresa May, the Prime Minister of the United Kingdom, to request for a longer extension have also ruined the contingency plans for some of them.
The shutdowns are generally organised far in advance so that staff holidays can be scheduled and the suppliers can adjust volumes, making them hard to move.
With the political leaders of the United Kingdom still deadlocked over Brexit and some states of the European Union questioning a further departure delay, Jeremy Wright, the culture minister, said the PM May would continue negotiations with the opposition Labour Party to try to come up with a compromise solution.
The Mini and Rolls-Royce plants of BMW in the United Kingdom are also closed down this week, as is the Vauxhall car factory of Peugeot, which brought forward summer shutdowns to this month.
Together JLR, Rolls-Royce, Mini, and Peugeot’s Vauxhall, branded as Opel in the rest of Europe, built more than 750,000 of the 1.52 million cars of the United Kingdom in 2018.
This April, Honda has also scheduled six “non-production days,” however, it has declined to disclose the exact dates of the closures.
The car sector of the United Kingdom has posted sharp declines in output, investment, and sales since 2017.
Last year, JLR had to reduce output, and in the year to March 2019, its global sales decline by almost 6 percent to 578,915 vehicles since it was badly affected by a sharp drop in China. On the other hand, sales in the United Kingdom increased by 8.4 percent.