A delay to Brexit would be more “annoyance” that would prolong uncertainty, the CEO of luxury automaker Aston Martin stated after Prime Minister Theresa May promised to give lawmakers a vote on increasing the date for Britain to depart the EU.
Many companies have been triggering contingency strategies on the assumption Britain will depart the European Union on March 29, so a delay could scupper the timing of those strategies.
Lawmakers will vote on if Brexit should be delayed on March 14, just over two weeks prior the scheduled departure date.
“I would categorize it as a further annoyance,” CEO Andy Palmer informed Reuters. “You’re holding that contingency stock for longer which means that your working capital is tied up for longer.”
“More importantly, what you’re doing is you’re creating continued uncertainty,” Palmer added.
Aston Martin, which is increasing volumes and building its first sport utility vehicle at a new factory, posted on Thursday a 26 percent increase in last year volumes and a 25 percent boost in earnnings.
But adjusted pre-tax profits dropped 7 percent to 68 million pounds ($90 million) before one-off costs related to its initial public offering, which amounted 136 million pounds.
The company stated that if some one-time pension-related credits were taken out of 2017’s numbers, adjusted pre-tax profit would have increased in 2018.
Volumes increased in each of its regions with demand increasing 31 percent in China, where other automakers, including Jaguar Land Rover, have reported declining demand.
Aston Martin stated it was confident it would provide another year of growth in 2019 but Brexit remained a significant uncertainty for the industry.
Britain’s once-soaring car industry is now recording decreasing sales, investment and production. Honda announced the most serious blow, with this month’s announcement it was shutting down its British factory.
Industry output dropped 18 percent last month, according to the information released on Thursday.
“That’s about consumer confidence,” stated Palmer. “We know there are other factors there as well but, fundamentally, why would you purchase a car in the present circumstances? We’re insulated from that but we’re not immune to it.”
Aston Martin last year announced plans to transform itself into a global luxury brand, and showed their willingness into investing in projects including speed boats, bicycles, clothing and real estate development, even submarines and aircraft.