China Selected By BMW For Production Of Its Minis, Threat To Its U.K. Operations

China is the preferred location for manufacturing of the new electric car of BMW, said the company that manufactures the well know British Mini car.

The company said that it anticipates strong local demand for electric cars and has already built a strategy long with China’s Great Wall Motors to scout a most suitable location for setting up of a manufacturing unit.

For BMW, China is its largest market. With the sale of 35,000 Minis in China last year, BMW had sold over 560,000 cars in the market in the same period which is greater in number of the vehicles sold by the company in the US and Germany combined.

“Production follows the market,” BMW said in a statement. “This signals a … clear commitment to the electrified future of the Mini brand.” It did not say when production in China would begin.

The company would be able to start manufacturing of the electric Mini by the year 2019 at the main factor for the model situated in the U.K., the company had said last year.

But following the latest announcement by the company, there are worries for thousands of jobs at the BMW factory in the U.K. as the production run is anticipated to be small.

“There is always a degree of ‘paranoia’ following announcements like this — especially with everything so politically charged in the UK,” said Justin Cox, a director and auto production expert at LMC Automotive.

“Some suggest that Mini’s future direction is to be an ‘all-electric’ brand. If that is the case, the Oxford plant will need be part of this transition to survive.”

In case the U.K.  leaving of the European Union, there are concerns about creation of new trade barriers and therefore the threat from Brexit which is to be effective from 2019 has turned out to be amongst the major worries for the British auto sector. The uncertainty that surrounded the results of the Brexit negotiations being woven out by the U.K. and the E.U. saw a drop in investment in the sector y 34 per cent last year.

The choice of BMW related to the place where it decides to set up its next generation unit starting in 2022 would be the most significant production decision in relation to its Mini, Ian Fletcher, a principal autos analyst at IHS Automotive, had warned last year. He had said that BMW could chose to shift its production unit outside of the U.K. at that point.

But last year, the company had reinstated its commitment to car production in the UK.

“The company has made significant investments over the years to step up its involvement in the country,” it said.

BMW can ensure a broader market and long term survival for its Mini by its foray into China and therefore ultimately would be in the interest of the model, Cox said.

“Expansion of the BMW brand in its largest markets, such as China, has not led to a decrease in production at the company’s German plants. On the contrary, between 2007 and 2017, production in Germany increased by close to a quarter,” BMW said

(Adapted from Money.CNN.com)

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