A top BMW executive has threatened the automaker would have to close its Mini and Rolls-Royce factories in Britain if Brexit seriously disrupts the supply chain.
Reuters noted the warning followed concerns voiced last week by the head of Siemens' operations in Britain, who told the news agency that the country should stay in the European Union customs union, contrary to the British government's policy.
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"We always said we can do our best and prepare everything but, if at the end of the day the supply chain will have a stop at the border, then we cannot produce our products in the UK," BMW customs manager Stephan Freismuth was quoted as saying by the Financial Times.
According to the report, around 60% of the 378,000 Minis BMW made last year came from Cowley. The rest were either contract-assembled by VDL Nedcar in the Netherlands or assembled locally in countries such as Malaysia. BMW factories in Swindon (body pressings), Hams Hall (engines) and Oxford (Cowley; assembly) currently employ around 6,300 workers.
Reuters said BMW's Freismuth said the company wanted to keep its British plants open and was working on contingency plans but that any disruption to imports of components would increase costs and damage its 'just in time' manufacturing model.
About 90% of the parts used in BMW's British factories come from mainland Europe, the report said.
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By GlobalData"If you have a stop for one day, it costs a lot of money but at the end if there are more stops our management have to decide how this can be sorted," Freismuth told the FT.
A BMW spokeswoman told Reuters: "We remain committed to our manufacturing operations in the UK and continue to operate business as usual, as we work through a range of possible Brexit outcomes and their potential impact on our business."
BMW however warned that the lack of clarity surrounding future customs arrangements remains a cause for concern.
"As previously stated, the ongoing uncertainty surrounding the Brexit negotiations is not helpful when it comes to making long-term business decisions," BMW said.
Its just-in-time production system requires the free movement of parts and goods.
"Clearly if parts cannot physically get to a factory at the expected time, that factory will not run as smoothly and reliably as is desirable," BMW told Reuters.
A British government spokesman told the news agency it was confident of securing a good deal with the EU that allows for the "most free and frictionless trade with our European neighbours".
"We are working with the sector to put the UK at the forefront of new automotive technologies to ensure we remain the destination of choice for future investment," he said.
