Mini production in Oxford
Bit by bit, BMW is likely to move production of the Mini to locations outside the UK.
(Photo: Bloomberg)
Munich Hardly any German company would be as affected by a hard Brexit as BMW. With Mini and Rolls-Royce, two out of three group brands have their headquarters on the island. Since the turn of the millennium, the Munich-based company has invested around eleven billion pounds in their British daughters.
If Great Britain leaves on January 1 without a trade agreement, it would be a hard blow for BMW. “That costs us a three-digit million amount a year, we will have to react to that,” said CFO Nicolas Peter in mid-December. The BMW managers are still hoping for an agreement at the last minute, but the alternatives are in the drawer.
According to Munich, BMW would have the customs formalities and possible delivery bottlenecks under control. The company had prepared for a “no-deal” Brexit several times. And this time, too, the warehouses are well filled. But in the long run the exit would be a disaster without a trade agreement: BMW would have to shell out ten percent import duties for exporting small cars to the EU.
You will have to increase the prices of the Mini, says Peter. In the medium and long term, the factories in Oxford and Hams Hall would hardly be competitive with the European group locations.
Relocation of production to other plants
“We are flexible with the Mini,” says Peter. Production in Oxford is likely to continue for the time being, but capacities will gradually be transferred to other plants. Part of the mini-production is already being assembled by the Dutch contract manufacturer Nedcar in Born.
From 2024, the Mini Countryman will be built in Saxony and with the 1 series at the Leipzig plant on the same line. This is possible because BMW is putting its compact series on the same technical platform as the Mini.
In addition to Leipzig, the Regensburg plant could also accommodate mini models. Since both plants can then also build electric cars in addition to combustion engines, theoretically all minis can then be manufactured in Germany.
In Asia, too, exports from Great Britain will soon no longer be needed. In 2019, BMW and Great Wall agreed to set up a joint venture to set up a production facility in China, which is due to start operations in 2022.
More: Why the contact ban at Christmas could affect the Brexit negotiations.