Monday, January 25

Exclusive: Aston Martin considers flying in components, changing ports to handle Brexit delays

LONDON (Reuters) – British carmaker Aston Martin (AML.L) is considering flying in components and moving more parts through ports other than Dover if there is any border friction after Britain leaves the EU, its boss told Reuters.

FILE PHOTO: An Aston Martin logo is seen on a car at a dealership in central London, Britain August 29, 2018. REUTERS/Henry Nicholls

London and Brussels hope to reach an agreement soon but the automotive sector is worried that port and motorway snarl-ups could disrupt production, affecting the movement of thousands of components and vehicles to and from the continent every day.

Aston, which earlier this month became the first British carmaker in decades to list on the London Stock Exchange, predominately uses Dover for moving components, but there is concern the port may not be able to cope with new red tape.

“The European-sourced parts, which include the engine and the gearbox as a complete assembly, come back in from Europe so an alternative port is one way, predominately for lorries, and then reserving space on aircrafts for one-off shipping,” Chief Executive Andy Palmer told Reuters.

“You can get a few days of engines and gearboxes relatively easily into the cargo decks of a plane so whilst it’s relatively expensive that is probably our primary backup,” he said, adding the firm only did so in an emergency at present.

Coventry and Birmingham airport, near the firm’s central English Gaydon plant, and the port of Sunderland are among the locations the firm is considering for such contingencies.

With Britain due to leave the European Union on Mar. 29, Palmer said the plan would have to be approved by the board by the end of the year in a sign of the decisions executives are needing to take without clarity on what Brexit will mean.

“There is undoubtedly a cost associated with it, but it’s cheaper than not building cars,” he said.

After earlier this year switching its car approvals from Britain’s vehicle agency to Spain’s due to uncertainty over the validity of such licenses, Palmer said its next model, the crossover DBX, will also be approved there.

“You’re forced to make a change,” he told Reuters. “Once you set in place a process, you tend to stick with that process because it works.”

The United States is also due to overtake Britain in 2018 as the firm’s single biggest country market as the firm continues a strategy to mitigate Brexit risk with a U.S. sales drive, reducing its reliance on the EU.

However, since listing at the start of the month, Aston’s share price has fallen by over 20 percent but Palmer said most shareholders knew the firm would deliver long-term value as it rolls out a series of new models.

“When we made the pitch to investors, I think almost all understood that this is basically a long-term story and it is all about value creation… and that’s what we are going to deliver,” he said.

Reporting by Costas Pitas; editing by Guy Faulconbridge

Our Standards:The Thomson Reuters Trust Principles.

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