BMW said it is reviewing its factories in the United Kingdom ahead of Brexit and that it has the flexibility to move production elsewhere if necessary.
The Munich-based manufacturer, which makes vehicles for its Mini brand in Oxford, Rolls-Royces in Goodwood and engines in Hams Hall near Birmingham, is preparing for “different scenarios” once the UK leaves the European Union, the BMW chief executive Harald Krueger said in Munich on Tuesday.
“Our production network offers us flexibility,” Mr Krueger said, noting that Minis are also built at a plant in the Netherlands. That said, “the UK remains an important location for us. Much will depend on how Brexit is ultimately negotiated”.
Car makers are concerned that the UK’s exit from the EU may lead to costly trade barriers, hampering the free movement of components and vehicles between production sites and end-consumers across Europe. Production of the Mini could move to BMW’s plant in Born, Netherlands, or to Leipzig, Germany, where 1-Series compact cars are rolled out based on a similar platform.
BMW’s comment on Brexit comes as the German car maker’s overseas operations become increasingly vulnerable to a possible clampdown on free trade. The US president Donald Trump criticised BMW for planning to make cars at a US$1 billion factory it is building in central Mexico, and threatened the car maker with a 35 per cent duty on autos it imports to the United States.
Despite these threats, BMW is pushing ahead with plans to roll out 3-Series models at the San Luis Potosi plant starting in 2019, said the chief financial Nicolas Peter on Tuesday. Construction at the site is “proceeding according to plan”, he said.
The German luxury-car maker plans to increase capacity at its site in Spartanburg, South Carolina, which makes X Series 4x4s, to 450,000 annually from 410,000 currently. BMW has said it is the largest exporter on a net basis from the US, with goods worth $10bn per year, and that it helps to support 70,000 jobs in the country.
* Bloomberg
business@thenational.ae
Follow The National's Business section on Twitter
