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BMW has said it is continuing to prepare for a so-called ‘no-deal’ Brexit, given ongoing political uncertainty surrounding the ratification of a terms-of-exit ‘outline agreement’ between the UK and the EU.

According to Reuters, BMW welcomed this week’s draft withdrawal agreement as a ‘positive step in the right direction’ but said the political situation was uncertain.

“Uncertainty is not good for business. As a responsible employer, we must therefore continue to prepare for the worst-case scenario, which is what a no-deal Brexit would represent,” it added in a statement reported by Reuters.

The statement from the maker of Mini brand cars at Oxford added: “We continue to call on all sides to work towards a final agreement which maintains the truly frictionless trade on which our international production network is based.”

In the summer, BMW executive Ian Robertson told just-auto: “If we do see delays [at borders], we will clearly have to make investments to overcome some of it – and that makes the industry less competitive, whether it’s new warehousing or customs systems that probably have to be committed before the end of this year, depending on how things are looking  from a political point of view.”

Under the outline agreement, a transition period to the end of 2020 would mean that all existing EU ‘regulatory, budgetary, supervisory, judiciary and enforcement instruments and structures’ would continue to apply within the UK, including rulings made in the Court of Justice of the EU. ‘Frictionless trade’ between the UK and EU would continue as now, the UK staying within the EU customs union. 

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By GlobalData

Earlier this week, the outline agreement on the terms of the UK’s exit from the EU in March next year was drafted by the EU and UK Brexit negotiating teams. It was then agreed by the UK government’s cabinet of ministers. However, it still needs ratification by the UK’s parliament and 27 EU member states.

In Britain, the cabinet’s collective ‘agreement’ was followed by ministerial resignations and speculation that opposition in parliament could be sizeable enough to prevent UK ratification, with uncertain consequences that could include a ‘no-deal’ scenario.

See also: SMMT says Brexit agreement ‘a positive step’

From July (and still as relevant): COMMENT – Be ready for no-deal Brexit scenarios

BMW stresses commitment to UK plants