BMW to decide location of its electric Mini plant by Sept 30

The uncertainty surrounding Britain, especially after the outcome of its June 8 snap elections, is taking a toll on the health of its economy.

As per a board member for sales at BMW, the carmaker will take a decision as to whether its plant for the new electric Mini car will be built in Britain or elsewhere.

The move will test whether Britain still has the ability to attract investments following its historic decision to leave the European Union.

Currently, nearly 70% of Mini’s approximate production of 360,000 compact cars are produced at its Oxford plant in southern England. However, Britain’s car industry could be significantly affected if it does not get unfettered access to EU’s single block market, which incidentally is its largest export market.

BMW is undecided whether it will install a plant at England or in the Netherlands, which has hosted many of its conventional line-up in recent years.

Its new low-emissions variants are built at its Leipzig and Regensburg plant in Germany.

The investment for the electric Mini is likely to be worth tens of millions of pounds. In the next three months, BMW’s board is set to factor in a host of variables, including factors coming from Brexit negotiations, in its decision to locate the plant.

“One of the elements is what is the likelihood of a tax regime and if there’s a tax regime, how would it apply,” said Ian Robertson. “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.

He went on to add, BMW is also looking into where the uptake of greener models is strongest and where the best supply chains are.

In the next few weeks, Britain is likely to approve its first major electric battery hub with ministers set to submit their proposals to British Prime Minister Theresa May.

Last month, in its strongest ever warning, the British car industry had stressed on the need for politicians to strike a transitional Brexit deal.

The uncertainty surrounding Britain’s economy heightened after a snap June 8 election called by May which left without a majority. Ministers in her administration have also hinted at different versions of Britain’s likely post-Brexit future.

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