What Does Brexit Mean for BMW?

The brexit votes have been tallied and the UK is officially leaving the EU. The implication are enormous throughout the world but at BF our immediate questions turn to MINI. While BMW has diversified production outside of the UK (the F57 in Netherlands and R60 is finishing production in Austria), the vast majority of MINI production still takes place in Oxford England. Add to that the Hams Hall engine plant and the BMW Group is very reliant on UK production across many product lines.

According to Matthias Wissmann, president of Germany’s VDA auto industry association, “We would have enormous challenges to overcome if Brexit wins. The German auto industry alone has 100 production sites in Britain including suppliers,” Matthias Wissmann, president of Germany’s VDA auto industry association told a news conference this week.

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More troubling is the real concern of a eventual trade dispute between the UK and the EU. “If there were a trade conflict between Britain and the European Union, the damage would be enormous for everybody,” Wissmann added.

What does it mean for MINI or BMW (who’s Hams Hall engine plant is a critical piece of the production triangle)? BMW has yet to make an official statement but you can be sure that they’ve already run the numbers and have contingency plans in place. How they play out remains to be seen but don’t be surprised to see further production diversification on the table.

Now for the positive. Is an independent England good for the MINI brand? We tend to think there could be some type of halo effect with the UK being seen as more independent and less diluted by a more generic European character. Regardless of the outcome MINI is tied to the English brand. And now its even more important (for MINI) that that brand remains strong.

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  • SockRolid

    England – the next Greece.

    • Nick Dawson

      I am very excited about Britain’s future prospects as an independent nation. The UK is the world’s fifth largest economy, and London is the second largest financial centre in the world after NY. It has the second lowest unemployment rate in Europe at 5%, roughly the same as the US – Germany 4.5% – and its Banking system is now in a healthy and stable condition. It is strong enough to weather the storm.

      Compare that to Greece which is totally bankrupt thanks to the Euro, is about to be bailed out by the EU for the fourth time, and currently suffers a 24% unemployment rate, with youth unemployment at over 50%. So long as Greece remains in the EU and is tied to the Euro, it’s fate is sealed. By the way, Spain also has a 24% unemployment rate, with youth unemployment at 45%. The EU experiment is over.

  • Herr26

    I would say the EU is finished if other referendums which are gathering attention in the wake of The UK departure. But then that was inevitable. Germany or any other European Car company would not let the EU jeopardise its market standing especially in the UK. Its a huge market especially for BMW. Just like Germany’s government is assisting VW Groups Diesel Gate “Schadenfreude” as jobs and Germany’s reputation are at stake.

    Greece is ready to implode, and mark my words, Spain is two years tops away from the same. There’s no way I would want to be on that ship. Long term (~12 months) the Pound will be much stronger than the euro. As it has been even when they were a part of the EU. Speak with any financial investor and they will always take the pound over the euro, especially now.

    You only have to look how ordinary people have now started to retaliate and see how far right politicians and parties are increasing in power and standing. Of course not just in Europe but also in the US.