The German companys chief financial officer, Nicolas Peter, said the Cowley plant would be closed from the evening shift on Thursday 31 October – Brexit deadline day – and re-open on Monday 4 November to minimise delays to deliveries.
Peter said BMW had no plans to shift manufacturing to other sites yet but that Cowley was likely to produce fewer cars under a no-deal Brexit.
“We would have to increase prices, and we have to curtail production to react to such a development,” Peter said on BMW’s contingency plans should the U.K. drop out of the EU without an agreement. “The plans are in the drawer.”
BMW to halt production at Oxford plant on planned Brexit date
No deal would mean that, most likely, [World Trade Organisation] tariffs would be imposed from 1 November onwards, Peter told the BBC at the Frankfurt motor show.
BMW already plans to suspend Mini production on the Oct. 31 deadline when Britain is expected to leave the European Union, as well as on Nov. 1, CFO Nicolas Peter told reporters on Tuesday on the sidelines of the Frankfurt auto show.
This would mean that we would most likely have to raise the prices of the products produced in the UK and shipped to other markets. The increase of price means an impact on the volume you sell, and would eventually lead to a reduction of produced cars in Oxford.
BMW has warned that leaving the EU with no deal may force it to stop making the Mini at Cowley, endangering more than 4,500 jobs and more than 100 years of carmaking at the site. It shifted some of its engine production from the West Midlands to Germany in July.
Last month BMWs chief executive, Harald Krüger, urged Boris Johnson to find a compromise to prevent damage to the UKs businesses and economy. BMW also makes Minis in the Netherlands and Peter said the company would use production cuts as a first step to manage a no-deal Brexit.
Suspending production on the date of Britains scheduled departure from the EU and the following day would shield BMW from logistics problems, he said.
Whats extremely important is to use the weeks we have before 31 October to develop and implement a constructive Brexit solution, Peter said.
Johnson has hardened his language since Krügers remarks, claiming he is seeking a deal but ruling out any extension designed to prevent the UK leaving in a chaotic no-deal outcome. He suspended parliament on Monday after saying he would sooner be dead in a ditch than seek an extension from the EU.
Investment in Britains car industry, which is highly integrated with the EU, has ground to a halt as a hard Brexit looms. The amount pledged for new investments in the first half of 2019 was £90m compared with between £2.5bn and £2.7bn a year before the Brexit vote.
Car industry executives have been among the most outspoken opponents of a no-deal Brexit, which could cause the imposition of tariffs of 10% on cars and 4.5% on components imported into the EU from the UK, as well as potential delays at the border.
Nicolas Peter said on the sidelines of the Frankfurt motor show that the first step to cope with a no-deal Brexit would mean shifts for workers could be slashed to mitigate increased costs.
“No-deal would mean that, most likely, [World Trade Organisation] tariffs would be imposed from 1 November,” Peter told the BBC in a TV interview.
“This would mean that we would most likely have to raise the prices of the products produced in the UK and shipped to other markets [in the EU]. The increase of price means an impact on the volume you sell, and would eventually lead to a reduction of produced cars in Oxford.”
Last month, the Society of Motor Manufacturers and Traders (SMMT) revealed that UK car production had continued to nosedive.
In July, manufacturing output fell by 10.6%, marking the 14th month of decline. The slump is now worse than the one suffered at the height of the financial crisis and marks the longest period of decline in UK car manufacturing since 2001.
A no-deal Brexit poses the greatest threat to many industries as leaving without an agreement means rules and regulations on everything from taxes to immigration, cease to exist, leading to a import-export tariffs gulf.
Mike Hawes, the chief executive of SMMT, previously warned that a no-deal Brexit poses an existential threat to the UK car industry, which relies on a steady stream of parts arriving from the continent.
We are highly integrated with Europe, and a no-deal Brexit would result in huge tariff costs and disruption that would threaten production, as well as further undermining international investors confidence in the UK.
We need a deal with the EU that secures frictionless and tariff free trade. No-deal Brexit is simply not an option.