Recent changes in leadership in the United Kingdom could change the country’s plans on how to go about Brexit. BMW’s Chief Executive hopes this can be the case and has called upon Boris Johnson to find a compromise on Brexit.
Harald Krüger, Chief Executive of BMW, said that if the United Kingdom leaves the European Union with no deal, it would be a lose-lose scenario. Krüger’s company has previously expressed that if a no deal scenario plays out, they might be forced to stop production of the Mini at the company’s Cowley plant which is situated near Oxford. If this happened, more than 4,500 people risk losing their jobs at the plant which has been making cars for over 100 years.
Krüger says that Johnson needs to take a moment and take a look at the economy and listen to what the people are saying. He added that dialogue with business is needed and he would visit the new Prime Minister to tell him all this. The comments by BMW’s boss contradict Johnson’s claims that the automotive industry in Germany will pressure the European Union into preventing a no-deal scenario in which tariffs are applied to exports. One fifth of the German car industry’s exports go to the United Kingdom, making it the biggest single export market for the industry.
In 2016, Johnson expressed the thought that tariffs would mean Germans would be cutting their own throats and therefore, it would not happen. The prime minister also suggested that he knows more about the automotive industry than Dr. Ralf Speth, Jaguar Land Rover’s Chief Executive. This came after Speth warned that it would be impossible for Jaguar Land Rover to stockpile enough parts to cope with a no deal scenario.
Car industry concerns over Brexit
BMW becomes the latest in a long line of car manufacturers who have expressed concern over the potential impact of Brexit. The car industry employs about 850,000 people in the United Kingdom and a huge chunk of these jobs are at risk should a no deal scenario play out.
The statement by Krüger came to BMW’s announcement of a 1.5% rise in sales during the second quarter of 2019. The company’s sales rose to 647,5999 vehicles during this period. However, BMW’s net profit took a 29% fall to €1.48 billion due to heavy investment in electric vehicles. As sales rise, traders might consider the option to buy BMW stock from free stock trading sites.
Reports coming out this week suggest that the car industry in the United Kingdom has come to a standstill as fears of a no deal scenario grow in the industry. Pledges for new developments in the final six months of the year are sitting at a paltry £90 million which shows just how deep the lack of faith in a beneficial Brexit deal goes. Prior to the announcement of Brexit, the investment in the car industry in the United Kingdom ranged between £2.5 billion and £2.7 billion per annum.