Jaguar Land Rover admits hard Brexit could threaten its UK future

The boss of Britain's biggest car maker has admitted its future in the country could be thrown into jeopardy by a hard Brexit - but said it has been encouraged by talks with the Government.

Ralf Speth, chief executive of Jaguar Land Rover, told Sky News that it would have to "see the facts" before deciding whether to continue manufacturing in the UK.

Dr Speth said that if the UK's divorce from Europe resulted in new tax and tariff barriers it would be a "huge challenge" for the company, which is the UK's biggest industrial employer.

But he revealed that JLR, which employs 25,000 people in the UK and is owned by India's Tata Motors (BSE: TATAMOTORS.BO - news) , has been in contact with ministers and was "very much encouraged".

It follows a deal - whose details have been kept secret - which saw Japanese manufacturer Nissan commit to building two new models at its Sunderland plant.

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That came after a much-publicised meeting between Nissan boss Carlos Ghosn and Prime Minister Theresa May at 10 Downing Street.

Mrs May and Chancellor Philip Hammond visited a JLR plant in September. JLR has called for a level playing field for UK car makers.

Dr Speth said: "Nissan has been 30 years in this country.

"Jaguar Land Rover is going to celebrate the ninetieth anniversary next year.

"So I am quite sure that the Government understands the importance of Jaguar Land Rover and so I am not concerned at all."

He said restrictions on exports to the continent would be a problem because Europe, where it sells more than 100,000 vehicles, is the company's biggest market.

Taxes and tariffs on imports into the UK would also mean higher costs, as half of JLR's spending on materials for manufacturing goes to Europe.

"If tax and tariffs will increase the overall cost side then we will see a huge challenge for Jaguar Land Rover," Dr Speth said.

Asked whether manufacturing might leave the UK, he said: "That's not up to us to decide now.

"First (Other OTC: FSTC - news) of all we have to see the facts and then we can decide."

Dr Speth was speaking as JLR unveiled its first electric vehicle at the Los Angeles motor show.

The car is being assembled at a plant in Austria because all of its UK manufacturing sites - at Castle Bromwich and Solihull in the West Midlands and at Halewood on Merseyside - are already working at full capacity.

That might be seen by some as an indicator of how it could place future manufacturing work outside the UK if Britain were to lose access to the single market.