Credit ratings agency Moody’s has asserted that the decrease in the price of sterling as well as manufacturing more cars overseas will help Jaguar Land Rover (JLR) remain financially healthy post-Brexit.
JLR currently employs approximately 4,300 staff in Halewood, manufacturing the Range Rover Evoque and Discovery Sport. Referring to the dangers ahead for the company post-Brexit, Moody’s said: “This could place downward pressure on JLR’s near and medium-term earnings.
"Over the medium term, the impact of Brexit on JLR’s operational performance will largely depend on new trading arrangements with the EU, with the risk being that trade with other countries will be subject to tariffs, though this process might take several years.”
However, Yasmina Serghini, Moody's associate managing director, concluded the outlook for JLR remains positive: "We are affirming the ratings on JLR because, while uncertainty created by the outcome of the referendum could dampen confidence and weigh on UK car sales, the company will benefit from a weaker pound, well-diversified geographic profile and efforts to diversify its manufacturing footprint over the medium-term by opening a new plant in Slovakia and entering into a manufacturing contract in Austria. JLR's enhanced product line-up and improved China sales will drive earnings growth and support our positive outlook in the next 12 months.”
Moody’s www.moodys.com
