Aston Martin CEO: No-deal Brexit is here
The boss of luxury car maker Aston Martin Lagonda has told CNBC that his company is already operating in a "no deal" Brexit scenario.
"From our point of view, a no-deal Brexit isn't something that is in the planning or might happen. No-deal Brexit has already happened for us," chief executive Andy Palmer told "Squawk Box Europe" on Thursday.
Palmer said the firm has a 12-week build time for its cars and therefore vehicles being manufactured now would be sold after the Brexit cut-off date at the end of March.
At present, Britain and Northern Ireland will leave the European Union on March 29th with no deal as U.K. lawmakers have failed to agree on the terms that can be signed off between London and Brussels.
Aston Martin has used a surplus of cash from a weakening pound to market more heavily in the United States in a bid to mitigate the effects of Brexit.
Describing that move as "very successful," Palmer said the U.K. car firm had also increased the level of stock in the supply chain from 3 days to 5 days and raised the level of cars ready for sale.
"I think we are in good shape, but I don't know what shape we have to be in because nobody knows what 'no-deal' Brexit looks like," he added.
If Britain leaves the EU without a deal, it is assumed it will rely on World Trade Organization rules that mean U.K. car manufacturers must produce at least 55 percent of a car with parts sourced in Britain — a specification known as "local content."
Palmer said Aston Martin had worked hard to reach the 55 percent level but warned that rival car companies could struggle.
Shares in Aston Martin Lagonda Global Holdings fell more than 15 percent Thursday as it swung to a loss in its first annual report card since joining the London Stock Exchange.
The stock was 1,168 pence by mid-morning Thursday after posting a pre-tax loss of £73.1 million ($97.2 million) in 2018. The share price is down 38 percent from its October initial public offering price of 1,900 pence.