As the deadline for Brexit looms over the distance, a recent announcement by the Uk Government said that not enough businesses were preparing for a “No-Deal Brexit”. However, Aston Martin Lagonda has confirmed a fund of £30m to help the company manage any specific Brexit-related disruption.
The car market has been firmly against a No-Deal scenario on the 29th March, Aston Martin has admitted it’s a lot more exposed to the issue of extra tariffs from a UK without a Trade Deal than competitors such as Jaguar or Nissan.
Why has Aston Martin announced this?
Aston Martin are one of the few car manufacturers who are speaking about the Elephant in the room without just outright blaming it for its woes. When Honda announced it would be closing its Swindon Factory and that Brexit was a major factor, a lot of big hitters came out to question whether Honda were just placing the blame on Brexit when in fact they had already planned to close the factory.
Aston Martin are a UK brand, moving all their operations overseas would lose them credibility, as they are now listed on the Stock Market the opinion of the wider business market is important to them long term.
The reality is, they have to be ready for Brexit and a No-Deal, by coming out head on and saying they expect extra tariffs and for their supply chain to be disrupted they are answering questions that many have been asking for months.
Investment experts such as the Investors Chronicle are suggesting that many sell their Stock in the Company, despite this announcement.
However, the fact Aston Martin have come out fighting, means they stand a chance of weathering the storm earlier than some of its rivals when it comes to the Press and PR battle.
The Devil is in the Detail
This isn’t just a cleverly crafted piece of PR though, Aston Martin have genuinely investigated Word Trade Organisation rules regarding use of products manufactured from local content. Meaning Aston Martin can confirm that should the UK leave without a deal they can still meet WTO Rules.
On this Aston Martin are already in Brexit territory, as their cars take on average 12 weeks to build, any customers ordering a car now will be getting it built when the UK has left the EU. With this, Aston Martin have confirmed they’ve already factored in shipping times for parts increasing from 3 days to 5 days when scoping their future workloads with current orders in place.
What has Aston Martin said?
Aston Martin’s Chief Exec Dr Andy Palmer told the Reuters news agency that any delay to the Brexit process would be a “further annoyance”
“You’re holding that contingency stock for longer which means that your working capital is tied up for longer.Dr Andy Palmer – Chief Executive Aston Martin Lagonda
The car company reported revenue of £1.1bn – up 25% from 2017 – however it blamed a series of costs, including £136m linked to its stock market listing, for the fact the company made a pre-tax loss of £68.2m.