A no-deal Brexit could lead to worker shifts being cut at a BMW (BMW.DE) Mini plant in Oxford, UK, says the auto titan’s finance chief.
Nicolas Peter said on the sidelines of the Frankfurt motor show that the “first step” to cope with a no-deal Brexit would mean shifts for workers could be slashed to mitigate increased costs.
"No-deal would mean that, most likely, [World Trade Organisation] tariffs would be imposed from 1 November," Peter told the BBC in a TV interview.
"This would mean that we would most likely have to raise the prices of the products produced in the UK and shipped to other markets [in the EU]. The increase of price means an impact on the volume you sell, and would eventually lead to a reduction of produced cars in Oxford."
Last month, the Society of Motor Manufacturers and Traders (SMMT) revealed that UK car production had continued to nosedive.
In July, manufacturing output fell by 10.6%, marking the 14th month of decline. The slump is now worse than the one suffered at the height of the financial crisis and marks the longest period of decline in UK car manufacturing since 2001.
A no-deal Brexit poses the greatest threat to many industries as leaving without an agreement means rules and regulations on everything from taxes to immigration, cease to exist, leading to a import-export tariffs gulf.
Mike Hawes, the chief executive of SMMT, previously warned that a no-deal Brexit poses an “existential threat” to the UK car industry, which relies on a steady stream of parts arriving from the continent.
“A no-deal Brexit presents an existential threat to our industry,” he said.
“We are highly integrated with Europe, and a no-deal Brexit would result in huge tariff costs and disruption that would threaten production, as well as further undermining international investors’ confidence in the UK.
“We need a deal with the EU that secures frictionless and tariff free trade. No-deal Brexit is simply not an option.”