By Costas Pitas
LONDON (Reuters) – Jaguar Land Rover (JLR) shuts its UK plants on Monday for five days over Brexit, adding to other shutdowns to leave at least half the country’s car production off-line in what could be a pivotal week for Britain’s divorce from the EU.
The move by Britain’s biggest carmaker, to prepare for any disruption resulting from Brexit, was taken a few months ago at a time when the departure date – since extended to April 12 – was March 29.
Automotive firms face a number of possible risks under a disorderly Brexit, including delays to the supply of ports and finished models, new customs bureaucracy, the need to recertify models and an up to 10 percent tariff on finished vehicles.
Prime Minister Theresa May’s efforts to obtain a longer extension have also ruined contingency plans for some of them.
Shutdowns are generally organised far in advance so employee holidays can be scheduled and suppliers can adjust volumes, making them hard to move.
With Britain’s political leaders still deadlocked over Brexit and some EU states questioning a further departure delay, culture minister Jeremy Wright said May would continue talks with the opposition Labour Party to try to find a compromise solution.
BMW’s UK Mini and Rolls-Royce plants are also shuttered this week, as is Peugeot’s Vauxhall factory, which brought forward summer shutdowns to April.
Together JLR, Mini, Rolls-Royce and Peugeot’s Vauxhall brand, which is branded as Opel on the continent, built over 750,000 of Britain’s 1.52 million cars last year.
Honda has also scheduled six “non-production days” in April but has declined to say on which dates they will take place.
Britain’s once buoyant car sector has since 2017 posted sharp falls in sales, output and investment.
JLR has already had to cut output last year as it faces declining sales, partly as customers shun diesel vehicles.
Overwhelmingly foreign-owned, the Britain-based car industry has become increasingly frustrated as a stable and attractive investment environment becomes mired in a deep political crises, risking free and frictionless trade.
At least 25 percent of Britain’s automotive engine capacity is also closed as BMW’s central English Hams Hall factory continues a four-week shutdown while JLR’s Wolverhampton site stops production for the week as part of Brexit preparations.
Honda engine production will also stop on six days this month.
(Reporting by Costas Pitas; editing by John Stonestreet)