BMW has moved some of its engine production output outside UK due to Brexit, showcasing how automakers are trying to handle uncertainty over the country’s decision to leave the European Union.
The news were confirmed to Reuters by BMW’s production chief Oliver Zipse.
The German car maker was building four-cylinder engines in the UK which were then sent to South Africa to be installed on the X3 SUV. Since UK would no longer enjoy the EU status, the cars would stop being tax-free to import into Europe, said Zipse.
“Hams Hall (the engine factory) doesn’t build any South Africa products anymore, which is of course, bad for the UK,” said Zipse. He noted, though, that “it’s not a huge amount”.
A BMW spokesman said that the UK engine factory will keep its output stable for this year, adding that the facility will export more engines to the Unites States. The company has also unveiled the battery-electric Mini Cooper SE today, which is going to be produced in Oxford later this year.
UK is set to leave the European Union on October 31, with Jeremy Hunt and Boris Johnson – the two candidates to replace PM Theresa May – saying that they are prepared to leave without reaching an agreement with Brussels.
A no-deal Brexit could lead to tariffs of up to 10 percent, not including the additional bureaucracy and costs for doing business in the country. However, everything is still on the table, leaving companies in uncertainty, at least for the next couple of months.