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Post-Brexit UK must try to influence EU car rules, McLaren Automotive says

Published 29/06/2017, 16:57
Post-Brexit UK must try to influence EU car rules, McLaren Automotive says
RACE
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By Costas Pitas

CHICHESTER, England (Reuters) - Britain must try to retain an influence over EU car rules after Brexit as any divergence in vehicle standards would add to local manufacturers' costs, sports carmaker McLaren Automotive said on Thursday, in the latest business warning to the government.

McLaren Automotive CEO Mike Flewitt also told Reuters he was looking to boost the company's graduate recruitment schemes in case the free movement of EU citizens is restricted, a sign of how firms are seeking to mitigate the risks of a "hard" Brexit.

Formula One's McLaren set up the separate McLaren Automotive in 2010 to rival the likes of Ferrari (NYSE:RACE), with the firm posting record sales and profits on Thursday.

But the UK car industry is increasingly worried about the shape of a Brexit deal with its top export market, warning a loss of access to the EU's single market and customs union would add tariffs and trade barriers, putting plants at risk.

Flewitt told Reuters Britain needed to maintain its influence on EU emissions rules, and differing vehicle standards between Britain and the bloc would make building vehicles pricier for no good reason.

"Right now all of the EU has one homologation standard and you can use the UK authorities to homologate and it is recognised across the whole of Europe," he said in an interview at the Goodwood Festival of Speed in southern England.

"It would add cost and it would add complexity if they start diverging slightly," he said.

McLaren, alongside the likes of Aston Martin, is one of several small British carmakers to benefit from special EU rules that recognise they cannot meet the same emissions standards across their range of cars as larger manufacturers.

Many are worried that without Britain at the table deciding on future standards, those advantages could be taken away, as Prime Minister Theresa May's government begins two-year talks on how to extricate Britain from its biggest trading partner.

Flewitt said his chief financial officer had already begun preparing for Brexit and was looking at how to mitigate any restrictions on immigration, which drove many Britons to back leaving the EU.

"We are looking at extending our graduate programmes, our apprenticeship programmes to develop more people internally in case there is any restriction on the mobility of skilled labour," he said, echoing initiatives underway at a variety of British companies.

As the young McLaren Automotive expands, there has been growing speculation about its future ownership.

Last year, Flewitt told Reuters the company's shareholders - which include Bahraini investment fund Mumtalakat and TAG, a company led by Saudi-born businessman Mansour Ojjeh - had turned down bids from prospective buyers.

On Thursday, he said it made sense for the sports carmaker to float on the stock market, but not until at least 2020.

"I do think we will do something like an IPO," Flewitt said.

"If I give a time frame, I'd say three to five years."

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