GENEVA (Reuters) – Production of BMW’s Mini will still be disrupted if there is a delay to Brexit, the carmaker’s CEO said on Tuesday, signaling the auto industry faces upheaval even if Britain avoids crashing out of the European Union without a withdrawal deal on March 29.
FILE PHOTO: A view shows the logo on a Mini car at a BMW dealership in Minsk, Belarus, March 2, 2017. REUTERS/Vasily Fedosenko
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 the potential disruption of a no-deal Brexit, such as building up inventories and in some cases organizing plant closures around Brexit day.
However, Prime Minister Theresa May said last week that if UK lawmakers once again rejected her Brexit deal, she would offer them a series of votes that could lead her to ask Brussels for a delay.
BMW said in September it was moving the annual maintenance shutdown for its Mini plant in Oxford, southern England, to April in case of disruption caused by Brexit.
“We have made preparations. If Brexit is delayed we can postpone some measures, but the early summer break remains scheduled for April,” CEO Harald Krueger said at the Geneva car show on Tuesday.
Shutdowns and stockpiles take time and money to arrange, as for example employee holidays and suppliers are affected, making them hard to move.
And so while carmakers are keen to avoid a no-deal Brexit, they also do not want the process to drag on.
BMW made 234,183 cars in Britain last year, out of the country’s total production of about 1.5 million.
FUTURE IN DOUBT
“Frankly speaking, we would just like to get certainty as quickly as possible,” Johan van Zyl, president and CEO of Toyota Europe said at an event late Monday, echoing recent comments from UK luxury sports car maker Aston Martin.
Zyl said Brexit planning had come at a “huge cost” and warned Britain needed to secure a frictionless trade deal with the EU.
“If anything happens between the EU and UK that will have a negative impact on competitiveness of the UK operations, it will put the future in doubt,” he said, referring to the entire UK car industry.
Japan’s Toyota made 129,070 cars at its Burnaston plant in central England in 2018 and is currently ramping up production of its new Corolla model.
Carlos Tavares, CEO of Peugeot and Citroen maker PSA Group, was more relaxed about a potential Brexit delay, saying he was in favor if the time was used to find a deal.
Daimler boss Dieter Zetsche, meanwhile, was hopeful a deal could be reached.
“It’s a game of poker. I am an optimistic person, and I hope that a no-deal Brexit is not realistic,” he said.
Reporting by Jan Schwartz, Laurence Frost, Edward Taylor, Costas Pitas and Gilles Guillaume; editing by Mark Potter