BMW to move production out f UK if no-deal Brexit occurs

06 Mar 2019

BMW warns on a no deal Brexit

BMW has warned, if there is no deal achieved in the departure of the country from the European Union (EU), it could move the production of its engines and their Mini model out of Britain.

The UK is due to leave the EU on March 29, however, after the agreement between Brussels and London was rejected by British lawmakers, the possibility of a chaotic exit could hit trade.

A potential risk of a no-deal Brexit is that British-made engines will no longer be counted as EU products, therefore pushing the total production level in some cars below the threshold of around 55% to 60% required in many international trade agreements.

The head of Mini at BMW, Peter Schwarzenbauer, commented:

“We have some flexibility on the engine side with Steyr in Austria.

“We would need to make some adjustments toward Steyr.

“We are preparing to be able to do it. Like we are preparing warehouses in the UK to produce cars.”

However, Schwarzenbauer added that the final decision about transferring production of engines from Hams Hall in England, where BMW has built over 375,000 engines in the last year alone, to Steyr in Austria has not yet been taken.

Toyota has also commented on the possibility of a no-deal Brexit, remarking that its competitiveness and British workers’ jobs would be at risk in the event of a no-deal scenario.

Operating two plants in the UK, Toyota currently employs 2,600 workers at one site and 600 at another. Company chief executive, Johan van Zyl, commented:

“If it’s a bad Brexit of course it will become very difficult.

“It will have a negative impact on competitiveness.

“We are still hopeful that we will have a realistic outcome that will give us frictionless trade and that will give us no tariffs and barriers between Europe and the UK.”

The car industry in the UK employs around 850,000 people and is dominated by foreign manufacturers, who have been rushing around through plans to cope with a potential no-deal Brexit, including stockpiling goods to build up inventory and some organising plant closures.

Theresa May, Prime Minister of the UK has however said that she will attempt to ask Brussels for a delay, should lawmakers reject her Brexit deal again.

By Lyba Nasir