March 7, 2017 / 12:22 PM / 2 years ago

Mini boss says UK production not essential to brand

GENEVA (Reuters) - Building in Britain is not essential to BMW’s (BMWG.DE) Mini brand as most customers do not know where the compact cars are built and its new electric model could be made elsewhere, the brand’s boss told Reuters on Tuesday.

Peter Schwarzenbauer, memeber of the Board of Management of BMW AG, introduces the 2017 Mini Countryman, all-wheel drive version, at the 2016 Los Angeles Auto Show in Los Angeles, California, U.S November 16, 2016. REUTERS/Lucy Nicholson

Peter Schwarzenbauer said the German carmaker would decide by the end of 2017 whether to build the new electric model at an existing site in Britain or the Netherlands, or whether to pick a new location.

The BMW board member said the possibility of post Brexit tariffs was “only one point ... when you have to decide where to produce a car” and the first question was where the model would be primarily sold.

But asked whether it really mattered to British or foreign buyers that the Mini, sometimes sold with the image of the union flag on the roof, is made in Britain, Schwarzenbauer said: “No.”

“The brand being perceived as British, that’s important but this does not mean necessarily that you have to produce it (in Britain).

“Most people don’t know where the cars are produced,” he said.

Mini makes around 70 percent of its 360,000 cars at its southern English Oxford plant but there are concerns that uncertainty over Britain’s future trading relationship with the EU could hurt the UK car industry, reliant on tariff-free trade.

Prime Minister Theresa May has said Britain will leave the EU’s single market and could also exit the customs union but she would seek to maintain the best possible access to the EU, the British car sector’s biggest export market.

Schwarzenbauer also noted elections in the Netherlands, where nationalist leader Geert Wilders is neck-and-neck with the Conservative prime minister ahead of polls next week, but said politics was only one factor in the decision-making process.

BMW is considering how many electric models might be sold in Europe or the United States, he said, and the firm constantly reassesses its global sites especially when it commits to new models to take into account a whole range of factors.

“As soon as you have bigger investments coming, you have to reevaluate and it’s not only in our Oxford (factory), it’s true for every factory around the world.

“Is the set-up still the right one? Do we have to extend it, do we have to reduce it?”

Reporting by Costas Pitas; Editing by Mark Potter

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