BMW stops UK production of engines for South Africa factory due to Brexit

BMW stopped producing engines at its Warwickshire factory for cars built in South Africa because of fears over post-Brexit tariffs, a senior figure at the firm has revealed.

Production chief Oliver Zipse, who has been tipped to become the company’s next chief executive, said the decision was implemented in early 2018 and is “bad for the UK”.

BMW has built petrol engines at its Hams Hall plant in Coleshill for use in several factories around the world since 2001.

But it is no longer supplying a factory in South Africa because the engines will not have been produced in a European Union member country after Brexit.

A BMW spokesman said the decision has not resulted in a cut to the total number of engines being made at Hams Hall – which stood at 377,000 in 2018 – as production for engines to be used in the US has increased.

Asked about the firm’s Brexit preparations on a visit to a factory in Oxford where BMW-owned Mini unveiled its first fully electric car, Mr Zipse said: “We have already adapted our local footprint.

“For example, engines which are built in Hams Hall, currently they are originated as EU products.

“If you would put that specific engine into an X3 in South Africa and you would have Brexit, that engine would not come out of the EU any more.

“That complete car would lose its tax-free import (status) into Europe.”

He went on: “Hams Hall (does not) build any South Africa products any more, which of course is bad for the UK because that specific engine is not being built here, it’s not providing labour any more in the country.

“That happened one-and-a-half years ago. It was very quick. That is what will happen. In that (situation) you will lose work in this country.”