No-deal Brexit will cost "hundreds of millions" says BMW

by

The Chief Financial Officer at German carmaker BMW issued a warning yesterday that a no-deal Brexit would cost the company "hundreds of millions" of euros, with increased costs from tariffs being passed on customers in the UK and mainland Europe.

Nicolas Peter said the automotive company, which manufactures Mini models in Oxford, had "plans in the drawer" for price increases that would come into effect should no agreement be reached by the end of the year.

Read more: BMW to retool German plants for EVs & relocate engine manufacture

Peter added that the Munich-based company was confident it would not have to close its plant in Oxford in the immediate aftermath of a no-deal Brexit as it has stockpiled components.

“Technically we are prepared,” he said. “We have the ability to transport cars and parts even in a no-deal scenario.”

The BMW factory in Oxford produces over 220,000 Minis per year and is a major employer in the region.

The CFO said that increased customs checks were not the biggest challenge to the company's UK business and the company would get "on top of the logistics very quickly".

“But there will be a 10 per cent tariff on cars,” he warned, “and that would have a negative effect in the mid-three-digit-million euro range per year.”

This "substantial" hit to profits would not be entirely covered by BMW, which would "pass on higher costs", Peter said, adding that "Minis in Europe and BMWs in the UK will be more expensive," without going into further detail.

Despite the UK importing significantly less German cars than in previous years - 590,000 in 2019, down from 810,000 in 2015 - the country is still BMW's fourth-largest market. 

Peter said that it was still too early to tell whether no-deal tariffs would affect the long-term future of the Oxford factory but he said that BMW was "flexibly positioned".

The company said there were also options for expanding production in its native Germany, as well as China, where it is developing an electric car. 

Read more: New lease of life for BMW EV batteries

The group also recently announced that it would be moving some Mini production to Leipzig, Germany from the Netherlands.

Peter said that the company had no involvement in negotiations between the UK and EU but said he hoped "that in the end a reasonable solution will be found."

Back to Homepage

Back to Transportation