BMW may move Mini production out of UK in a disorderly Brexit

A disorderly brexit complicates with problems such as higher tariffs, as well as a disruption to supply chains which would hinder businesses' operations.

BMW AG Source: Bloomberg

German multi-national firm BMW may be moving the production of the carmaker’s Mini to plants outside of Britain if a disorderly Brexit occurs.

Automakers have been caught in a fix as the Brexit March 29th deadline draws near and the deal is not yet sorted out. A disorderly brexit complicates with problems such as higher tariffs, as well as a disruption to supply chains which would hinder businesses' operations.

Mr Peter Schwarzenbauer, head of BMW’s Mini brand told Sky News the firm will not be able to afford the costs to production of the Minis if export tariffs were introduced in a no-deal Brexit. The firm would consider closing its Cowley plant in Oxford and moving the operations elsewhere. The Cowley plant currently employs more than 4,500 people.

‘If this (no-deal Brexit) was to come, which is the worst-case scenario … we would need to consider what it actually means for us in the long run,’ Mr Schwarzenbauer said.

A delayed Brexit will also not be welcomed, he added, as the industry has already been planning in advance for the exit due March to prevent a disruption to operations.

The German carmaker said in September it has timed its annual maintenance shutdown to the Brexit period to sit out from a potentially disorderly exit.

UK auto industry sees exiters

BMW’s warning follows Honda’s plans to close its Swindon plant and Nissan scraping the production of its X-Trail SUV in Sunderland. Automaker Ford Motor also warned that it could move its business overseas because of Brexit.

Britain’s car industry employs around 850,000 people, and automakers have been rushing to prevent a disruption to their businesses ahead of Brexit date, such as building up inventories.

Japanese carmaker Toyota followed other automakers on the call for clarity on Brexit. In an event on Monday, Toyota Europe’s president and chief executive Johan van Zyl called for a certainty on Brexit ‘as quickly as possible’.

United Kingdom's (UK) prime minister Theresa May last week appealed for more time to renegotiate the Brexit deal, adding that if her deal was rejected she would offer a series of votes which could lead to a Brexit delay.

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