Tata Motors' Jaguar and Land Rover operations may get affected by Brexit

Brexit may adversely impact the operations of the Jaguar and Land Rover (JLR) car brands. Both the British brands owned by Tata Motors may see an increase in costs on account of imposition of tariff barriers and job losses in the sector if Britons vote for an exit from the European Union on June 23, reports ET Auto.

While the impact in the UK market is expected to be severe, the India operations of JLR could experience a limited effect. Brexit is likely to dampen the positive growth that JLR has started to record after Tata Motors acquired both the brands in 2008. This will indirectly affect Tata Motors' consolidated global earnings in the end.

"Remaining in the EU, our largest market, will increase Jaguar Land Rover's chances to grow, create jobs and attract investment in future technologies. Our European supply chain has been fundamental in helping us to meet customer expectations worldwide and achieve sustainable, profitable growth," Ken Gregor, chief financial officer of JLR, told PTI.

The JLR brand is heavily dependent on EU countries for production of its vehicles. Europe accounted for 24 percent of JLR's global sales last fiscal, and the U.K. and Europe contributed 44 percent to JLR's total volumes. The company also sources 35-40 percent of components from EU countries. The impact on these remains to be seen if the British bid adieu to the EU.