Will Nissan leave the UK after Brexit

 

Munich / Ingolstadt - The trade agreement between Great Britain and the EU has not yet been fully ratified. But it is temporarily in force - and has been regulating further coexistence and common economic activity since January 1st, i.e. the final departure of the British from the community. Those companies that would have been hit hard by a so-called hard Brexit are particularly pleased that a solution has been put on paper at all.

BMW is such a company. After all, the Munich-based automotive group has two brands that are at home on the island (see info box). In addition to the noble bodies from Rolls-Royce, whose customers could have safely cope with one or the other customs euro, Mini was the focus of the Brexit chaos. CFO Nicolas Peter was already planning that Minis in the EU and BMW models in Great Britain would have to become more expensive to compensate for any new tariffs. At the request of our newspaper, the group said with relief: "We welcome the agreement on future trade relations between the European Union and the United Kingdom." BMW's emergency plans can therefore remain in the drawer.

At least now. Because not all questions have been resolved by a long way, strangers can be found in the Brexit equation: "A full assessment of the significance of the agreement can only be made after all the details have been published," as a spokeswoman for our newspaper said.

The Ingolstadt-based BMW rival Audi also welcomes the last-minute agreement to our newspaper. However, a company spokesman announced: "We will examine the negotiated agreements and their effects on our individual business activities in detail." According to the company, the British market is currently Audi's fourth largest worldwide. In Europe it is also the second largest behind the home market.

In addition, Audi will take over the British luxury brand Bentley from parent company Volkswagen in a few weeks. This suddenly raises questions similar to those for BMW for the Ingolstadt-based company. Audi therefore emphasizes, "Clarity about future relationships creates planning security for the entire Volkswagen Group and its British brand Bentley Motors and is particularly important for our British customers".

The fact is: yes, there is a contract. But it still has to go to the EU Parliament and Brexit has not made trade between the island and the continent any easier. Take logistics, for example: British and European freight forwarders can still cross the English Channel without being disturbed, but the number of stops - for example to unload or pick up freight - has been limited for British companies. And there will be a mess of papers. Because the trade remains basically duty-free, but there have to be countless forms and papers in order to import goods to Great Britain and vice versa. After all, the UK has left the EU's internal market for good.

Nevertheless, what counts for BMW and other car manufacturers in Europe first and foremost is that there have been no new customs barriers and thus no or only slight tensions in the supply chains. "Avoiding customs duties and additional administrative obstacles will help to minimize the effects of Brexit on our international production network and our sales activities," says BMW. And Audi announces that a task force has been working continuously to ensure the flow of materials since the start of the Brexit discussion. "As things stand, there are no disruptions in our supply chains," said the Audi spokesman. In addition, Audi models for Great Britain would be transported by ship anyway. So the traffic problems around the turn of the year on the road on the border with the United Kingdom were not an issue.

From the point of view of the British auto industry - and thus also for minis or Bentleys made in England - the agreement is not that straightforward. Because, according to the Brexit Deal, only vehicles that are 60 percent and more made from parts of British or European production can be imported into the EU duty-free. This is particularly bitter for Nissan. The Japanese have production facilities in England - according to their own information, they are the largest vehicle manufacturer on the island. Of course, the group uses many parts that come from the Far East.

For a long time it was even speculated that the production of the Mini could ultimately be brought to the continent - even with a Brexit deal. BMW does not explicitly comment on this to our newspaper, but emphasizes: "The Oxford and Swindon plants are still in a planned production interruption over the Christmas period until January 18, during which various planned renovation projects are being implemented." Among other things, the paint shop will be extensively modernized. Such work is expensive and of course planned well in advance. Relocation of production, for example to BMW's Bavarian locations in Landshut or Regensburg, seems extremely unlikely

Christian Tamm