BMW has temporarily shelved development of its next generation Mini and extended the current range's life so it can prepare for the potential economic impacts of - yes, that old chestnut - Brexit. While Mini production is split between the brand's Oxford hub and Dutch contractor, VDL Nedcar, the present business case is said to be unsustainable if tariffs were to surpass five per cent. The firm has therefore decided to wait until the outcome of UK-EU negotiations is clearer before investing in its future line-up - meaning the now seven-year-old hatch will remain on sale for longer than initially intended.
Making matters more challenging is a slowdown in Mini sales, with 346,639 deliveries in 2019 equating to a 4.9 per cent reduction on the year before; in December, sales tumbled by a worrying 18 per cent. This comes at a time when the BMW Group is seeking to cut €12 billion in spending from its budget by 2022, making it even harder to justify any significant investment until the fogs clear. Developing all-new models is extremely expensive, after all. So the BMW UKL1 platform is to remain in use alongside a further-reduced lineup of engine options to help lower costs and improve efficiency.
In contrast, Nissan is bidding to capitalise on its rivals' struggles if Brexit negotiations don't yield a free trade agreement, with the Japanese car maker's Sunderland plant able to dodge any tariffs that European-made rivals could not. With no resulting price increases for the consumer, Nissan could - according to a report seen by the Financial Times - grow market share to 20 per cent, a five-fold improvement on its present performance. The firm is said to have already drawn up a plan, with production of the Micra to be shifted from Barcelona to Sunderland should tariffs be introduced.
That being said, a spokesperson for Nissan conceded that a move to World Trade Organisation tariffs would make the company's "business both in the UK and in Europe ... not sustainable". Such a scenario would add a 10 per cent tax when cars crossed the UK-EU border, something that would hit all manufacturers on both sides hard. For this reason it's an unlikely outcome, although Boris Johnson has refused to rule out the option, with the prime minister maintaining that a no-deal scenario remains on the table during negotiations. Unsurprisingly, it seems like the UK car industry will need to hold its breath for a little longer.
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