If it was not for the pneumonia epidemic in the Lunar New Year, on January 31, 2020, it will be remembered by more people who are concerned about the international situation: on this day Britain officially broke out of the European Union, and the English Channel will become the Chu River and Han Kingdom 47 years later.
But this day, it’s not yet time for British and European kiss goodbye. Johnson’s encouraging statement in the television speech, “‘Brexit’ is not the end but the beginning”, must be full of approval in British businessmen-but it may not be what Johnson wants to express. The breakup was a foregone conclusion, but after the breakup they got along and the young couple had not reached an agreement. Before the end of 2020, the UK enters the transition period of Brexit. The UK and Europe must spend everything in the remaining 11 months, otherwise there will be a Brexit situation with no agreement.
In this context, the BMW Group’s MINI, a British car brand, is planning to delay the arrival of the next model. This is currently the first British car company to adjust its product rhythm due to the impact of Brexit.
The third-generation MINI (F56) currently in production appeared in 2014. According to the practice of the seven-year generation of European luxury car brands, it should have been replaced by the next-generation model around 2021. But now due to the uncertainty brought about by Brexit, the launch of the next generation of MINI will be delayed to 2022-2023, that is, the life of the current MINI has been extended by one to two years.
The BMW Group launched the new MINI in 2000. In order to retain the British heritage of the MINI, although a significant part of the MINI model is from the European continent, the final assembly line is still placed at the Oxford plant in the UK. This was wise at the time, but after Brexit, the economic alliance between Britain and EU countries no longer exists. Originally, the MINI was free to ship important components from continental Europe to the UK for final assembly, and then the Oxford-produced MINI was freely sold to continental Europe, but no one knows how this “freedom” will evolve after Brexit.
The simple and predictable cost increase is a problem of concealment. The real headache is the uncertainty after Brexit. For multinational companies, the uncertainty of the trading environment has never been a good friend.
In the next nearly one year, it is currently unpredictable whether Britain and the EU will finally reach a new trade agreement, when the new agreement will arrive, and the extent and form of trade barriers under the new agreement. If the MINI continues to be upgraded as planned in 2021, its production arrangements must be completed in 2020. However, before the end of 2020, no one knows whether the new trade agreement between the UK and the EU will continue with relatively low tariffs or increase trade barriers (which may make the UK assembly unbearable), or In the end, no agreement was reached to enter a chaotic no-deal Brexit (this is the worst case).
If the final British-European negotiations are not conducive to MINI’s previous production arrangements, MINI can first consider transferring some of the final assembly tasks to the continental European countries such as the Netherlands and Austria. The MINI Oxford plant is responsible for the production of the classic MINI hatchback (MINI Hatch or formerly known as the MINI Cooper), while other derivative models of the MINI such as Contryman have expanded to BMW locations across the globe. But in this way, MINI’s proud “pure British descent” will inevitably be affected. At the same time, the demand of the British local market also makes MINI pay a price for it anyway.
A bit further,MINI has established a joint venture (Beam Car) with Great Wall in China. The electric MINI produced in the Chinese factory will be supplied to both the Chinese market and exports, while the fuel vehicles produced here can only be used for export. The huge changes brought by electrification may make MINI leave the British hometown and then import “home”, which is not so unacceptable.
The late arrival of the new generation of MINI is to avoid the need to identify important arrangements at the most risky level, but this will inevitably affect the competitiveness of MINI after 2021. Compared to other car brands, the unique British production and British roots of MINI make it even more sensitive to Brexit.