BMW mulling its Brexit op­tions

Query: To UK or not to UK?

The Star Early Edition - - BUSINESS REPORT - Costas Pi­tas

BMW will de­cide whether to build its new elec­tric Mini car in Bri­tain or else­where by the end of Septem­ber, its board mem­ber for sales told Reuters, in a test of the coun­try’s abil­ity to con­tinue to at­tract in­vest­ment as it leaves the EU.

Mini makes about 70 per­cent of its es­ti­mated 360 000 com­pact cars at its Ox­ford plant in south­ern Eng­land but the car in­dus­try is con­cerned about the ef­fect any loss of un­fet­tered ac­cess to the EU, its largest ex­port mar­ket, could have on plants af­ter Brexit.

BMW is de­cid­ing be­tween its English site, a plant in the Nether­lands where it has built more of its con­ven­tional line-up in re­cent years, and its Germany plants at Leipzig and Re­gens­burg for the new low-emis­sions vari­ant.

The firm’s board mem­ber for sales told Reuters that the elec­tric Mini in­vest­ment, likely to be worth tens of mil­lions of pounds, would come in the next three months and the board was cur­rently con­sid­er­ing a num­ber of fac­tors in­clud­ing Brexit.

“One of the el­e­ments is what is the like­li­hood of a tax regime and if there’s a tax regime, how would it ap­ply,” Ian Robert­son said dur­ing an in­ter­view at the Good­wood Fes­ti­val of Speed in south­ern Eng­land.

Duty calls

“If you made the mo­tor in a Ger­man plant and you then as­sem­bled the car in a Bri­tish plant, and you took the cars back to the Ger­man mar­ket, then the duty that you would pay would be re­claimed,” he said, in an ex­am­ple of the op­tions com­pa­nies are ex­am­in­ing to plan for any du­ties or tar­iffs.

The car­maker is also look­ing into where the up­take of greener mod­els is strong­est and where the best sup­ply chains are, he said.

Bri­tain could ap­prove its first ma­jor elec­tric bat­tery hub in the next few weeks af­ter of­fi­cials in cen­tral Eng­land sub­mit­ted pro­pos­als to min­is­ters in May.

But last month, the car in­dus­try is­sued its strong­est warn­ing yet on the need for politi­cians to strike a tran­si­tional Brexit deal af­ter two-year talks to en­sure that un­fet­tered trade is main­tained. Un­cer­tainty has also been height­ened af­ter a snap June 8 elec­tion.

Con­trary to ex­pec­ta­tions, the elec­tion left Prime Min­is­ter Theresa May with­out a ma­jor­ity and has led to min­is­ters in her ad­min­is­tra­tion hint­ing at dif­fer­ent ver­sions of Bri­tain’s likely post-Brexit fu­ture.

Last year, May’s ad­min­is­tra­tion helped se­cure two new mod­els at Ja­panese car­maker Nis­san’s plant in the north of Eng­land af­ter what a source said was a govern­ment prom­ise of ex­tra sup­port to counter any loss of com­pet­i­tive­ness caused by Brexit.

Robert­son told Reuters there was an “open chan­nel” with of­fi­cials and that he had sev­eral meet­ings with the Brexit min­istry. He added that busi­ness min­is­ter Greg Clark had vis­ited BMW in Mu­nich, and that his team was in reg­u­lar con­tact with Clark’s.

The firm’s board is cur­rently con­sid­er­ing a num­ber of fac­tors in­clud­ing Brexit and es­pe­cially Brexit’s tax im­pli­ca­tions.

PHOTO: AP

The Mini John Cooper Works Pace­man at the North Amer­i­can In­ter­na­tional Auto Show. Whether the new elec­tric Mini be built in Bri­tain de­pends on the Brexit dance.

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