Custom arrangement costs because of Brexit would increase price of its vehicles, BMW has said,
The making of cars such as the Mini would become costlier because of new border systems and warehousing, said Ian Robertson, BMW’s UK special representative.
He said: “It’s a potential risk… we would like to avoid.”
And in case there is no clarity about the trading relationship between the UK and the EU, BMW would be forced to make investments in customs systems by late summer, he said.
The company would be forced into preparing and investing for a hard Brexit and delays in customs along a hard border by August or September if there is no clarity, he told the media.
Mr Robertson said: “Those dates at the end of the summer are quite real. That’s when the contingency plans get applied, and that’s when of course we need to see clarity.”
He however has made it clear that there are no plans for of company to move out production and manufacturing outside of the UK.
“We would have to start to think about how our trucks are going to be managed at the border and how our stocks are going to be stored around our factories,” Robertson said.
“It puts a burden on industry. It puts a burden on us to find ways around it, when ultimately we should be focussed on more constructive issues.
“Our customers have expectations as to the value in their cars. They see innovation and technology as having a value. I can tell you, I have never heard one that says there’s a value in customs.”
Despite the warning by the Society of Motor Manufacturers and Traders about the halving of the investments in the car industry in the UK in the last year because of lack of clarity over Brexit, there are some companies such as Toyota that are investing in the country.
There is still a strong appeal of the UK for the Japanese car companies, said Kōji Tsuruoka, Japanese Ambassador to the UK, in an interview.
He said: “The UK is an industrialised, very strong R&D supported economy, and there is flexibility in moving toward the future of the industry. The referendum result did not necessarily affect the attraction or the strength of the UK R&D high-tech basis, and you still see Japanese investment coming to those sectors of the UK economy.
“But when it comes to trade, and market availability, they will have to reconsider, if there is any obstruction for doing trade with a major market to which they export from the UK – and the EU market is certainly one of them. They will watch very carefully and very cautiously.”
BMW was a par4t of a business group that had demanded hat that the trade agreement with the EU must be “as frictionless as with a customs union” during a meeting with Prime Minister Theresa May in the month of May this year.
There are 8000 people directly employed by BMW in the UK for its manufacturing operation and it UK retail network employs another 14,000.
(Adapted from BBC.com)