Aston Martin Plans US Spending Boost to Hedge Brexit Effect – Bloomberg

British luxury sports-car maker Aston Martin Holdings Ltd. has a Brexit contingency plan: crank up spending in the U.S., its biggest market.

“We’ve been putting a lot of effort in the U.S.,” Chief Executive Officer Andy Palmer said in an interview in Tokyo. The reason is the company doesn’t think any contagion will spread to the U.S. in the event consumer confidence drops when Britain leaves the European Union, he said.

In signs the automaker is spending more in the U.S., Aston Martin last month made a foray into real estate for the first time to establish a broader luxury brand. Partnering with property developer G&G Business Development, Aston Martin broke ground on a 66-story apartment tower in downtown Miami on Oct. 18.

The Gaydon, England-based automaker known for its cars featured in James Bond movies is among companies weighing options as the formal process of the U.K. exiting the EU drags on after last year’s vote. While possible non-tariff barriers such as local-content rules and vehicle standards worry him the most, Palmer said on the whole he is “pretty neutral” because a weaker pound would balance out the imposition of any tariffs.

The talks are hung up over how much money the U.K. will pay when it leaves the 28-member bloc, delaying crucial negotiations on the future trading relationship. Both sides are hoping for a breakthrough at a December summit as Britain prepares to walk out of the group in March 2019 with or without a deal. 

Cars Made in U.K. May Struggle to Be British Enough Post-Brexit

“How one calculates local content in future is one of the factors we need to be worrying about because normally you need to get 60 percent,” Palmer said separately in a Bloomberg Television interview on Wednesday.

As a European maker, Aston Martin has about 95 percent local content, but from the standpoint of the U.K., that drops to about 45 percent because the company manufactures its engines in Germany and sources gearboxes from there, he said. “That would require us to, for example, move the production of our engines,” he said.

As a company whose exports account for 80 percent of its sales, the carmaker has been in a sweet spot so far as the British currency weakened since the Brexit vote while all free-trade agreements still remain in place.

Japan, China

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