Motoring bosses prepare for a quick getaway in event of no-deal Brexit

BMW, Toyota and PSA Group mulling temporary plant closures to minimise disruption

BMW chief Harald Krüger at the Paris Motor Show on Tuesday. ‘If there is no solution, then there will only be losers on both sides,’ he said.  Photograph: Marlene Awaad/Bloomberg

BMW chief Harald Krüger at the Paris Motor Show on Tuesday. ‘If there is no solution, then there will only be losers on both sides,’ he said. Photograph: Marlene Awaad/Bloomberg

 

Warnings from motor industry bosses about the consequences of a no-deal Brexit have become significantly more pointed, with BMW chief executive Harald Krüger stating at the Paris Motor Show that his company “would be forced to build in the Netherlands”.

BMW’s Oxford plant produces the Mini range of cars, but the company has a contract manufacturing plant with VDL Nedcar in Born, Netherlands.

“If there is no solution, then there will only be losers on both sides,” he told reporters at the event. “We are preparing for a difficult situation with Brexit.”

With Oxford operated on a just-in-time delivery system, and 150 trucks delivering parts each day to the plant, BMW has already confirmed it will close the plant for a month at the end of March to minimise disruption in case of a no-deal outcome.

It is estimated that more than 1,100 trucks cross into the UK every day to deliver parts to plants making vehicles and engines, the majority of which are then exported back to the EU.

Toyota Motors Europe chief executive Johan van Zyl told The Irish Times: “The time is running out so we are getting to a situation where we will have to start getting answers. It’s very difficult to speculate now and say what will happen, because there are so many scenarios that can happen.”

Parts supply

He indicated that, if there is no deal on Brexit, it may mean the company’s plant near Derby, which employs nearly 4,000 workers producing the Auris and Avensis models, may have to close for a short period if there is disruption to its just-in-time parts supply. Currently parts arrive every four hours.

We’ve been in the UK for more than 25 years already. We want to be there, and we would like to stay

Mr van Zyl said the solution is not as simple as adding extra warehousing, as parts are sequenced from multiple suppliers to arrive at exactly the right time for the line.

“We are businesspeople, not politicians, so if the British citizens have decided this is what they want, it’s up to us to decide under those circumstances if we want to be there,” he said.

“We’ve been in the UK for more than 25 years already. We want to be there, and we would like to stay. We are a long-term investor there, so we have to see what’s going to happen, and then we can do with that.”

PSA Group chief executive Carlos Tavares pleaded for a deal to be done. “There needs to be a deal,” he said. “If there isn’t one, my responsibility will be to protect my company.”

The car giant has factories in the UK after purchasing Vauxhall from General Motors last year.

Emissions regulations

Several manufacturers have indicated that Brexit may push up the price of new cars coming from the UK. It comes as car industry bosses are also warning that increased emissions regulations will also increase costs, which will invariably be passed on to customers.

The European Parliament votes this week on tough new rules that will force the car industry to cut CO2 emissions by 2030. While the industry wants a 20 per cent cut in emissions by the end of the next decade, some countries are pushing for a 30 per cent reduction. Toyota’s Mr van Zyl said that would be much more difficult to achieve.

Carmakers already have to reduce CO2 emissions by 2020 or face significant fines, a goal that is spurring the launch of electric cars across Europe over the next two years.