After the British voted to exit the European Union (EU) on June 23 this year, various companies have been busy formulating strategies to counter the ill effects on their businesses. One of the hardest hit in the process would have been the Tatas, especially two of its companies in the UK – Jaguar Land Rover Automotive Plc (JLR) and Tata Steel UK Holdings Ltd.
Mistry, an Irish national of Indian origin, was appointed as a director in JLR soon after being appointed chairman of the Tata group in December 2012. JLR which manufactures two iconic cars – Jaguar and Land Rover – hasn’t performed badly under Mistry. In 2016, the group’s profits were £1.3 billion, which were almost £700 million short as compared to the year before. In 2014, as Mistry completed a year at JLR, the auto maker earned £1.8 billion in profits. Its sales have gradually increased by almost £1.5 billion under Mistry. He also oversaw JLR’s expansion in China after a deal was inked with the Chinese state-owned car maker Chery just months before his appointment at the helm of the Tata group.
But with Brexit, JLR under Mistry was faced with a tough situation. Europe accounts for a quarter of the sales of JLR. With Britain exiting the EU, the exports of JLR cars to Europe would attract a levy of 14 per cent. Import of components to make those cars in Britain would attract a duty of four per cent. These would have made JLR cars more expensive and negatively impacted their demand outside Britain.