A no-deal Brexit would price German carmaker BMW “lots of of tens of millions” of euros, with elevated tariffs handed on to customers within the UK and continental Europe, the group’s chief monetary officer warned on Wednesday.
Nicolas Peter mentioned the premium producer, which produces Mini fashions in Oxford, had “plans [for price increases] within the drawer” that may take impact if no settlement was reached by the top of the 12 months.
However he mentioned the Munich-based firm was assured it will not need to shut its Oxford plant within the fast aftermath of a no-deal Brexit, as a result of BMW had stockpiled elements.
“Technically we’re ready,” Mr Peter mentioned. “We’ve got the power to move vehicles and components even in a no-deal state of affairs.”
BMW’s UK manufacturing unit produces greater than 220,000 Minis per 12 months, and is a giant employer within the space.
The chief mentioned elevated customs checks wouldn’t be the most important problem to BMW’s British enterprise, and the corporate would “be on prime of the logistics in a short time”.
“However there can be a ten per cent tariff on vehicles,” he warned, “and that may have a unfavorable impact [on BMW] within the mid-three-digit-million euro vary per 12 months”.
This “substantial” hit to earnings wouldn’t be wholly swallowed by the group, which might “move on larger prices”, Mr Peter added. “Minis in Europe and BMWs in UK can be costlier,” he confirmed, however didn’t present additional particulars on the extent of any enhance.
German automobile producers’ publicity to Britain has fallen sharply lately, with simply 590,000 vehicles exported to the nation in 2019, down from 810,000 in 2015, in accordance with business lobbyists, the VDA. Nonetheless, the UK is the fourth-largest marketplace for BMW.
Whereas he mentioned it was too early to inform whether or not no-deal tariffs would have an effect on the long-term way forward for the Oxford plant, Mr Peter mentioned BMW was “flexibly positioned” when it got here to Mini manufacturing.
The corporate additionally had choices to increase manufacturing in Germany and China, he mentioned, the place it’s creating an electrical model of the automobile.
The group, which additionally owns Rolls-Royce, lately introduced it will transfer some Mini manufacturing from the Netherlands to Leipzig, in Germany.
Mr Peter mentioned that BMW was “not concerned” in negotiations between the EU and UK, however hoped “that ultimately an affordable resolution can be discovered”.