BMW could move some UK engine, Mini output if no orderly Brexit

BMW could shift some production of engines and its Mini model out of the UK if the country does not secure an orderly exit from the European Union, the German automaker stated on Tuesday, in the latest Brexit warning from the auto industry.

UK, the world’s fifth-largest economy, is about to exit the EU on March 29 but an agreement between London and Brussels has been declined by UK lawmakers leaving open the possibility of a chaotic departure that could hit trade.

One risk of a no-deal Brexit is that British-made engines will no longer be taken as EU content, pushing the overall level in some cars below the threshold of about 55 to 60 percent needed in many international trade agreements.

“We have some flexibility on the engine side with Steyr in Austria,” stated Peter Schwarzenbauer, the head of BMW’s Mini brand, to Reuters at the Geneva car show, discussing 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 stated.

A final decision on whether to shift some production of engines from Hams Hall in central England, where BMW constructed over 375,000 engines last year, to Austria has not yet been taken, Schwarzenbauer stated.

Asked by Sky News whether BMW could shift Mini production out of its Oxford plant located in southern England in the event of a chaotic Brexit, Schwarzenbauer stated: “We at least have to consider it.”

Britain’s once rising car industry is now recording fall in sales, investment and output, with Japan’s Honda delivering the biggest blow until now by declaring plans to close its UK factory.