Jaguar Land Rover Could Have Its Profit Cut By 1 Billion Pounds

Coventry: Britain’s biggest car-maker, Jaguar Land Rover has estimated that its annual profit could be cut by one billion pounds ($1.47 billion) by the end of the decade if Britain leaves the European Union.

The rapidly-expanding firm, which traces its history back to 1922 and is headquartered in Coventry, central England, has also looked into opening a European office were Britain to quit the bloc.

The worst-case-scenario estimate is in the internal documents that were prepared by the firm’s chief economist, David Rea, to outline the possible consequences if Britons vote to leave the world’s biggest trading bloc in Thursday’s referendum. It gives an insight into the level of concern at a major company about the uncertainties of a future outside the EU.

Jaguar Land Rover has also put on hold starting major work on a plant in Slovakia announced in December as well as negotiations on a deal to lease property at Silverstone race track because of the uncertainty surrounding Thursday’s vote.

The one billion pound decline in pre-tax profit by 2020 would apply if Britain returned to World Trade Organization rules for trade with Europe, involving a 10 percent tariff on exports and an inbound tariff of roughly four percent on components.

Jaguar Land Rover, which built nearly one in three of Britain’s 1.6 million cars last year, is undergoing a major expansion of its lineup, and has joined the rest of the overwhelmingly foreign-owned car industry in calling on Britons to remain in the bloc.