BMW’s Oxford plant in southern England, which produced 60% of its vehicles in 2017, will take a significant hit.
On Tuesday, BMW’s CEO Harald Krueger stated, he sees a 50% chance of Britain leaving the European Union without a trade agreement. In the case of a disorderly exit, BMW will be forced to shift more production of its Mini vehicles to the Netherlands, said Krueger.
“I told (UK Prime Minister Theresa May and the European Union that if there is a hard Brexit, both sides are losers. We will no longer fulfill trade agreements and then we are forced to build the car in the Netherlands,” said Krueger to journalists at the Paris Motor Show. “Hard Brexit is currently not our main scenario but we are preparing for it. We see a 50:50 chance.”
Most of its Mini vehicles are currently built at its plant in Oxford, southern England. However, it relies heavily on components that are built in its its factories in Germany.
Oxford produced around 60% of the 378,486 Minis produced in 2017.
In case of a cliffhanger Brexit, Oxford’s status as the global exporting hub for BMW’s Mini would be at risk, said Krueger.
When asked whether a hard Brexit would make the Netherlands the main exporting hub for supplying customers in the European Union, Krueger said: “Yes.”
Significantly, BMW has quietly built up Netherlands-based contract manufacturer VDL Nedcar as a new export base for its Mini brand. At the plant staffing levels have already jumped to nearly 7,200, up from 4,500 in 2017 and 1,450 in 2014.
In contrast, staffing levels at its Oxford plant have remained relatively stable over the same period, with just over 4,500 people working on building Minis in Oxford.
According to Krueger, sales in Britain have already suffered midst increasing uncertainty over Brexit.
However, on he whole, the group’s vehicles continue to record double-digit sales growth in China despite geopolitical tensions between Beijing and Washington.
Demand in Europe has largely been distorted after the onset of stricter emission standards known as WLTP rules.
“European sales are not being driven by market demand, but by WLTP distortions. These will last between six and nine months,” said Krueger.