BMW Would Cut Oxford Plant Output in No Deal Brexit, CFO Says

(Bloomberg) -- BMW AG would reduce output at its plant in Oxford by eliminating a work shift should the U.K. opt for a hard Brexit, according to its chief financial officer.

The German carmaker already plans to completely halt production on the Oct. 31 deadline when Britain is expected to leave the European Union, as well as on Nov. 1, CFO Nicolas Peter told reporters on Tuesday on the sidelines of the Frankfurt motor show.

“We’d have to increase prices, and we have to curtail production to react to such a development,” Peter said on BMW’s contingency plans should the U.K. drop out of the EU without an agreement. “The plans are in the drawer.”

Carmakers have for over a year warned a no-deal Brexit would mean shifting production out of the U.K. Toyota Motor Corp. has estimated daily costs running into the millions, and it said last week it would stop production on the day of departure. BMW has set aside 300 million euros ($331 million) to deal with any Brexit-related costs.

BMW is battling trade turmoil on several fronts, including a potential return of tariffs between U.S. and China. The company is considering whether to produce the X5, one of its best-selling sports utility vehicles, in China to avoid the prolonged spat, according to Peter. The X3 and X2 models are made in China.

Peter on Tuesday also reiterated BMW’s full-year guidance, saying targets should be achievable in the current economic conditions.

To contact the reporter on this story: Oliver Sachgau in Munich at osachgau@bloomberg.net

To contact the editors responsible for this story: Tara Patel at tpatel2@bloomberg.net, ;Anthony Palazzo at apalazzo@bloomberg.net, Andrew Noël

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