BMW Bails on the UK due to Brexit Concerns

Brexit is causing big shifts even in the automotive industry which led to BMW moving manufacturing from West Midlands to Germany.

As BMW Leaves, Will Others Follow?

BMW’s Hams Hall plant in West Midlands includes manufacturing of engines headed for BMW’s South Africa plant. The Hams Hall plant has about 800 workers. While the Hams Hall plant will stay open and still produce other engines, those that were working on the engines headed for South Africa could be out of a job. It’s important to understand the automotive industry’s stance on Brexit and how this upcoming shift will affect other auto brands that manufacture within the UK.

The UK plans on leaving the EU at the end of October this year and if that happens, the automotive industry is going to have to deal with tariffs on their vehicles, which amount to 10 percent on cars and 4.5 percent on components imported into the EU from the UK. Tariffs are not the only issue automakers have to deal with, they’ll also have to handle delays from customs when trying to import parts across borders. BMW won’t be the last to make a change this large based on Brexit.

Other automotive executives have spoken out about Brexit. Earlier this year, Nissan, Toyota, and Mini were vocal about their concerns. Brands are uncertain about absorbing the proposed tariff costs, which at 10 percent, is a massive cost across each brand. Brexit not only will cause a decline in automotive plant jobs in the UK, the added tariffs, tracking, and potential delays could also affect consumers at the end of the manufacturing processes.

Preparing for Brexit

While BMW and other automotive brands make changes where they can and work to prepare for Brexit, should it happen this fall, there are sure to be massive ripple effects across brands that will undoubtedly trickle over toward consumers. Brexit updates will continue throughout the coming months, so it will be interesting to see what other brands will also pull out of the UK.

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