BMW could move some production of engines and its Mini model out of Britain if the country does not secure an orderly departure from the European Union, the German carmaker said on Tuesday, in the latest Brexit warning from the auto industry.
Britain, the world’s fifth-largest economy, is due to leave the EU on March 29 but an agreement between London and Brussels has been rejected by British lawmakers leaving open the possibility of a chaotic exit that could hit trade.
One risk of a no-deal Brexit is that British-made engines will no longer be counted as EU content, pushing the total level in some cars below the threshold of around 55 to 60 percent required in many international trade agreements.
“We have some flexibility on the engine side with Steyr in Austria,” Peter Schwarzenbauer, the head of BMW’s Mini brand, told Reuters at the Geneva car show, referring to another BMW plant. “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,” Schwarzenbauer said.
A final decision on whether to transfer some production of engines from Hams Hall in central England, where BMW built over 375,000 engines last year, to Austria has not yet been taken, Schwarzenbauer added.
Asked by Sky News if BMW could move Mini production out of its Oxford plant in southern England in the event of a chaotic Brexit, Schwarzenbauer said: “We at least have to consider it.”
Britain’s car industry, which employs around 850,000 people and is largely owned by foreign manufacturers, has been rushing through plans to cope with a potential no-deal Brexit, such as building up inventories and in some cases organizing plant closures around Brexit day.