As we’re getting closer to the end of this challenging year, the EU and UK are also getting to the point when they will say goodbye for good. The Brexit situation has been looming over the world for quite some time now, ever since the UK voted to leave the EU in 2016. The implications of this move have been speculated upon a number of times but nobody could easily estimate what kind of impact this change would have on the world economy as the separation terms hadn’t been set in stone. As January 1, 2021 is rapidly approaching we’re learning that an agreement might not be reached.
That’s a scenario that is shaping up more clearly by the day, as the two negotiating sides are seemingly not able to reach an agreement. Such an outcome would surely have an impact on all car makers, including (or maybe I should say especially) BMW. The company is still making MINIs at their original factory in Oxford and also has an engine plant in the UK, both very important operations for the Bavarians and the country itself. However, if there won’t be a favorable deal met by the end of the year and Brexit will take place without it, the Germans might have to move.
That’s what the company CFO Nicolas Peter said Wednesday. Speaking to Bloomberg, Peter said the impact a no-deal Brexit would have on the BMW Group would be “mid-three-digit” million-euro amount per year. That’s a lot of money and measures to compensate could be taken. That includes raising prices on cars imported to the UK, as well as on every Oxford-made MINI sold on the continent.
Even then, the situation would still be rather tricky and BMW could be forced to move its production entirely out of the UK. MINI is already making cars in China and Austria, at the Graz plant. These factories could get even more work in the future if the business case for making them in Oxford on the long run doesn’t sustain itself.