What Does the Brexit Mean for MINI?
The brexit votes have been tallied and the UK is officially leaving the EU. The implication are enormous throughout the world but at MF our immediate questions turn to MINI. While BMW has diversified production outside of the UK (the F57 in Netherlands and R60 is finishing production in Austria), the vast majority of production still takes place in Oxford England.
According to Matthias Wissmann, president of Germany’s VDA auto industry association, “We would have enormous challenges to overcome if Brexit wins. The German auto industry alone has 100 production sites in Britain including suppliers,” Matthias Wissmann, president of Germany’s VDA auto industry association told a news conference this week.
More troubling is the real concern of a eventual trade dispute between the UK and the EU. “If there were a trade conflict between Britain and the European Union, the damage would be enormous for everybody,” Wissmann added.
What does it mean for MINI? BMW has yet to make an official statement but you can be sure that they’ve already run the numbers and have contingency plans in place. How they play out remains to be seen but don’t be surprised to see further production diversification on the table.
Now for the positive. Is an independent England good for the MINI brand? We tend to think there could be some type of halo effect with the UK being seen as more independent and less diluted by a more generic European character. Regardless of the outcome MINI is tied to the English brand. And now its even more important (for MINI) that that brand remains strong.
<p>BMW has just issued the following statement:</p>
<p>“BMW Group respects the British electorate’s decision to leave the EU. While it is clear there will now be a period of uncertainty, there will be no immediate change to our operations in the UK.”</p>
<p>Nick, if Scotland leaves the UK, will I have to change my graphics? (You know my car.)</p>
<p>No</p>
<p>So Cameron impales himself on a sword, nice going.
The MINI factory in Belgium may get busier as a result….</p>
<p>Both the governing Conservative party and the opposition Labour party totally misjudged the mood of the electorate.</p>
<p>The other MINI factory is in the Netherlands, not Belgium, and has limited capacity.</p>
<p>Capacity can always be expanded at the former Mitsu factory if UK is hit by tariffs in retribution</p>
<p>The UK buys more Audis, BMWs, MBs, Porsches and VWs than any other country in the EU, outside of Germany, by a big margin. Germany is the most dominant of the EU countries, and the German auto industry has a powerful lobby in Brussels, and is not going to ‘cut off it’s nose to spite its own face’ and agree to tariffs on their cars sold to the UK.</p>
<p>True, but the EU as we knew it may not be long for this world. The winds, they are changing.</p>
<p>The sooner the better!</p>
<p>My favorite summary:</p>
<p><a href="http://www.bloomberg.com/view/articles/2016-06-24/eight-consequences-of-the-u-k-s-vote" rel="nofollow ugc">http://www.bloomberg.com/view/articles/2016-06-24/eight-consequences-of-the-u-k-s-vote</a></p>
<p>Very negative and complete nonsense, but it’s good for a laugh :)</p>
<p>You are right Jan Wojcik</p>
<p>In that case, you might be interested to read the comment by Herr26 – a BMW insider – on the BimmerFile article ‘What does Brexit mean for BMW?’.</p>
<p>It’s fascinating to me to see the dramatic differences of opinion based on what side of the Atlantic you’re on.</p>
<p>How Bmw will deal with the rising production costs ? every customer including you in the US could be impacted</p>
<p>The weakness of the pound vs the dollar could offset that. But yes I can imagine there are many expected and unforeseen costs that will be introduced to the production and shipping process.</p>
<p>While the Pound Sterling is low, all UK exports including MINIs will be cheaper, which is one of the immediate benefits of the Brexit referendum leave vote, and BMW will no doubt be ‘making hay while the sun shines’. By the way, it now transpires that January 1, 2019 is now realistically the most likely date for the UK to leave the EU.</p>
<p>UK exports may not be as cheap as you may think as “Brexit’s supporters are deluded when they argue that Britain could cherry pick what it likes about the European Union and discard the rest. Since exports to the European Union (13 percent of G.D.P. in 2014) matter much more to Britain than exports to Britain (3 percent of G.D.P. in 2014) do to the European Union, the European Union will call the shots. Other governments have every incentive to be tough, both to steal a competitive advantage and to deter others from following Britain out the door.” (today’s NYTimes)</p>
<p>The UK currently buys considerably more goods from other EU countries than it sells to them – a situation that has existed for many years – resulting in a huge trade deficit for the UK. Be in no doubt, the EU needs the UK more than the UK needs the EU.</p>
<p>What do you expect the NY Times — the mouthpiece of the global economic elite — to do but fantasize about destroying the UK in print when their worldview has met such an essential challenge?</p>
<p>It’s fascinating to see the difference in opinion between people just over here in the UK. The lies on both sides of the campaign just showed you can’t trust a politician.</p>
<p>Not so. Last year, Jaguar Land Rover announced a new manufacturing agreement with Magna Steyr in Graz Austria, to build JLR models as soon as production of the F60/61 Countryman/Paceman has ceased.</p>
<p>If the UK is hit by tariffs in retribution, this American won’t be buying any cars (MINI or otherwise) manufactured in continental Europe.</p>
<p>Some might argue/say that as an “American” you should be buying US/American cars and not European or other countries cars regardless of trade policies or other issues.</p>
<p>For me, UK voters chose to leave EU, they have to live with the results. As the saying goes “careful what you wish for”.</p>
<p>Some might say — protectionists — I am not one, I believe in free trade. If the EU chooses to start a trade war with the UK, they will find out who America’s best ally is in a hurry, is my guess. So yeah, be careful what you wish for….</p>
<p>Scotland’s parliament is already preparing a new referendum to leave the UK and remain in the EU. The Union Jack may never be the same without the Saltire…</p>
<p>Porsche chief executive, Oliver Blume, is confident the UK will remain a key market for the brand, despite the referendum vote to leave the European Union.</p>
<p>“We will continue to work together with our colleagues in the UK as we did before – first because they are our friends and second because I think the Porsche enthusiasm in the UK will remain at the same level in the future as well,” he said at yesterday’s launch of the new Porsche Panamera.</p>
<p>Brexit may never happen judging by the rate of disarray of politics in the UK.
Blume is allowed to dream, but he really has no impact on what may happen in the automobile world.</p>
<p>Oh ye of little faith! Brexit most certainly will happen, and there is no turning back. Following a 72% British electoral turnout, and a 1.27 million majority vote in favour of leaving the EU, it would make a mockery of democracy if the decision was reversed. There will inevitably be some upheaval, but there is no gain without pain.</p>
<p>The opposition Labour party really is in disarray, but the governing Conservative party now has to appoint a new Prime Minister, a process which takes two months to complete. Five strong candidates were nominated by today’s deadline, all of whom are totally committed to Brexit.</p>
<p>Perhaps, but ..
“Negotiating over Brexit will stretch the tolerance of both British voters and European leaders. Yet the EU specialises in muddled compromises and talking its way around referendums. After months of economic hardship, and a recession-induced fall in immigration, British voters may be ready to think differently about the balance between immigration, the economy and their place in Europe. By far the most likely outcome of this sorry situation remains Brexit. But it would be wrong completely to discount the possibility of an inelegant, humiliating, and yet welcome, Breversal.”
(Economist)</p>
<p>Oh no, not the Economist, please!</p>
<p>Let’s leave it at that.</p>