Post-Brexit FTA would benefit JLR buyers

JAGUAR Land Rover (JLR) believes a mooted free-trade agreement (FTA) between Australia and the United Kingdom in the wake of a post-hard ‘Brexit’ should result in less expensive vehicles that are built in the United Kingdom for consumers Down Under.

In an interview with GoAuto at this month’s launch of the Jaguar XE facelift and F-Pace SVR in Byron Bay, JLR Australia managing director Mark Cameron said he expects the Boris Johnson-led British government will waste no time in seeking FTA partnerships with many countries, including Australia, in the event of a no-deal Brexit.

“If there is a hard Brexit, which is looking more likely, we don’t know how quickly FTA can be put in place,” he said.

“Right now, as part of Europe, we pay a duty to bring our cars from Europe into Australia. It’s been said publicly in the last week or so on the Australian and British side, both parties want to get to an FTA very quickly between the UK and Australia for the benefit of both countries.

“For us, in Australia, that could give us a better outcome than what we have today, and so we have to wait and see the details, what trade agreements can be put in place post a hard Brexit if that’s what happens, and what does that look like for our industrial footprint?”

While most Jaguar and Land Rover vehicles would benefit from a post-hard Brexit UK/Australia FTA, some models such as the I-Pace EV made in Austria and the new Defender that will be manufactured in Slovakia would not qualify, falling under a separate EU agreement with Australia.

Whatever happens, Mr Cameron added that any impending fear of Brexit had nothing to do with JLR’s moving production of some models outside of the UK, since these decisions were made years in advance of the Brexit referendum in June 2016.

“We are building the Discovery in Slovakia before Defender will be built,” he said. “And, actually, and this is where some people rewrite history here, we made the decision to go in Slovakia well before people imagined that Brexit would happen.

“We knew we needed to build another factory somewhere else in the world, just to give us a hedging against currency movements, supply issues etc, and we chose continental Europe. That’s probably turned out to be a good choice in hindsight, but it wasn’t driven at all by Brexit.”

In January, the British government issued a press release stating that British trade with Australia “will continue when the UK leaves the European Union, supporting jobs in both countries” under ‘The Mutual Recognition Agreement on Conformity Assessment’.

It added that both nations had committed “to seeking a new ambitious, comprehensive free-trade agreement that will allow UK and Australian companies to enjoy an even closer trading relationship after the UK leaves the European Union”. Among the industries singled out is the automotive sector.

According to the federal department of foreign affairs and trade, the UK is Australia’s eighth-largest trading partner, with two-way trade valued at $26.9 billion in 2018.