BMW: Brexit would cost the auto sector nearly € 11 billion – Le Blog Auto

BMW Brexit would cost the auto sector nearly E 11 - BMW: Brexit would cost the auto sector nearly € 11 billion - Le Blog Auto

According to BMW's Chief Financial Officer (CFO) Nicolas Peter, the UK's exit from the European Union could cost the automotive industry up to 11 billion euros (manufacturers and suppliers combined).

A situation that is difficult to manage, unless cross-border trade remains free of customs duties and not subject to administrative constraints deemed to be bureaucratic to say the least.

A colossal budget needed to prepare for Brexit

BMW has spent a "weak" double-digit euro million this year preparing for Brexit, Peter Peter told reporters in a virtual panel discussion on Thursday.

However, recalls the CFO of BMW, the automotive industry association ACEA has estimated that this could cost automakers and suppliers from 10 to 11 billion euros ".

BMW pleads for duty-free trade and a fluid system

"We need trade free of tariffs," said the leader. Adding that even if this was the case (which nevertheless seems difficult to see materialized in the short term), the system had to be transparent for the sector.

“We have a just-in-time manufacturing system, so the administrative processing at customs must be efficient,” he continued.

Pollutant emissions: BMW calls for requirements similar to those of the EU

Nicolas Peter also believes that the UK should continue to keep pace with EU emissions requirements so that automakers can offer the same cars in all European markets. A remark full of meaning … but the subject of which has received little attention, if at all …

Strong demand for electric and hybrid cars has helped BMW stay ahead of the fleet's 2020 emission reduction targets, said Nicolas Peter.

The Mini transferred to the Netherlands in the event of a hard Brexit

In August 2019, BMW said it could go one step further outside the UK in the event of a hard Brexit.

In the absence of agreement on the terms of the country's exit from the European Union, the German manufacturer then declared that it could transfer a new part of its production from its Oxford plant, where it assembles on time current Mini. Their assembly could be carried out in the Netherlands.

BMW CEO Harald Krüger said at the time that production transfers from the Oxford plant to other production units, notably in the Netherlands were being considered. Claiming the automaker was very "flexible," the leader said BMW could "adjust volumes at Oxford and Nedcar, the Netherlands. "

The Netherlands hypothesis considered for several months for the Mini

In October 2018, on the sidelines of the Paris Auto Show, Harald Krüger, then CEO of the BMW group, declared that an exit of the United Kingdom from the European Union without an agreement would force the German group to increase production at the Dutch factory. by VDL Nedcar.

“I told British Prime Minister Theresa May and the European Union that if there was a no-deal Brexit, both sides would lose. We will no longer respect the trade agreements and we will be obliged to build the Mini in the Netherlands, ”Harald Krüger said at the time.

While BMW currently produces most of its Mini vehicles at the Cowley plant near Oxford, much of the components are imported from BMW's German factories. An exit of the United Kingdom from the European Union without a deal would have a serious impact.

Growing importance of the Netherlands

BMW has also taken other less publicized measures in recent months. The German manufacturer has therefore started to make VDL Nedcar its export base for the Mini. The Dutch factory produces the Mini 3-door and convertible as well as the Countryman. The production of Mini is growing steadily and the workforce is growing. These fell from 4,500 in 2017 to 7,200 in 2018. While the workforce at the Cowley plant remained stable.

When asked whether a hard Brexit would make the Netherlands the main Mini production center for European Union markets, Mr Krüger answered in the affirmative.

British employment impacted

UK jobs could be in serious jeopardy, as BMW employs just over 4,500 people at Oxford, the site where 234,501 Minis were assembled in 2018.

It should also be remembered that due to the uncertainties surrounding the United Kingdom's exit from the European Union, BMW announced in July 2019 that it had moved part of its engine production out of British territory.

The British BMW factory at Hams Hall no longer produces engines for South Africa, which is obviously "bad news for the United Kingdom", the BMW production manager himself admitted at the time. .

Our opinion, by

While the deadline of December 31, 2020 is fast approaching, the situation seems a little more daunting day to day … and inextricable. It could indeed induce colossal costs for manufacturers, already undermined by the health crisis and the decline in demand.

Sources: BMW, Reuters

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