BMW is threatening to move Cowley Mini assembly and Hams Hall engine production from the UK in case of a no-deal Brexit.
The automaker told Sky News production of the Mini in Oxford may be at risk.
Peter Schwarzenbauer, the board member responsible for Mini and Rolls Royce, said the automaker would “need to consider” moving production from the UK as the company could not absorb the extra costs it would inevitably face.
He also told Reuters news agency at the Geneva show some engine manufacturing could be lost to Austria.
“We have some flexibility on the engine side with Steyr in Austria,” said. “We would need to make some adjustments toward Steyr.
“We are preparing to be able to do it. Like we are preparing warehouses in the UK to produce cars,” Schwarzenbauer said.
A final decision on whether to transfer some production of engines from Hams Hall in central England, where BMW machined and assembled over 375,000 engines last year, to Austria had not yet been taken, Schwarzenbauer added.
Asked by Sky News if BMW could move Mini production out of its Oxford plant in southern England in the event of a chaotic Brexit, Schwarzenbauer said: “We at least have to consider it.”
A no-deal Brexit was “really a danger”.
Reuters noted British prime minister Theresa May said last week that if UK lawmakers again rejected her Brexit deal [which ties the UK much more closer to the EU than hardline Brexiteers want], she would offer them a series of votes that could lead her to ask Brussels for a delay.
BMW said in September it was moving the annual maintenance shutdown for its Oxford Mini plant to April in case of Brexit disruption.
“We have made preparations. If Brexit is delayed we can postpone some measures, but the early summer break remains scheduled for April,” CEO Harald Krueger told Reuters in Geneva.
Shutdowns and stockpiles take time and money to arrange, as for example employee holidays and suppliers are affected, making them hard to change.
While carmakers are keen to avoid a no-deal Brexit, they also do not want the process to drag on.
BMW made 234,183 cars in Britain last year, of the country’s total production of about 1.5m.
Toyota also called for clarity on Brexit, Reuters reported.
“Frankly speaking, we would just like to get certainty as quickly as possible,” Johan van Zyl, president and CEO of Toyota Europe, said on the eve of the show, echoing recent comments from Aston Martin.
Zyl said Brexit planning had come at a “huge cost” and warned Britain needed to secure a frictionless trade deal with the EU.
“If anything happens between the EU and UK that will have a negative impact on competitiveness of the UK operations, it will put the future in doubt,” he said, referring to the entire UK car industry.
Toyota made 129,070 cars at its Burnaston plant last year and is currently ramping up production of its new Corolla model.
Carlos Tavares, CEO of Peugeot and Citroen maker PSA Group, was more relaxed about a potential Brexit delay, saying he was in favour if the time was used to find a deal.
Daimler boss Dieter Zetsche, meanwhile, was hopeful a deal could be reached.
“It’s a game of poker. I am an optimistic person, and I hope that a no-deal Brexit is not realistic,” he told Reuters.
Due to capacity restraints at Cowley, some Mini assembly is outsourced to NedCar in the Netherlands while some production earlier was assigned to contract assembler Magna Steyr in Graz, Austria.
While Brexit has not been explicitly blamed by Nissan for its U-turn on building new X-trail models in Sunderland, or Honda for its decision to close its Swindon plant, the carmakers agree that Brexit will add to their costs and make them less competitive, Sky News said.
That is mainly because of the risk of disruption to supplies from bolstered border checks and the threat of extra tariffs.
Other pressures in the sector include the global economic slowdown and shift towards electric models from diesel and petrol.