Britain’s separation from the European Union could cost carmakers and suppliers up to $13 billion unless cross-border trade remains tariff-free and unbureaucratic, said BMW Chief Financial Advisor, Nicolas Peter.
During a virtual roundtable discussion on Thursday, Peter told journalists that BMW has spent about a million dollars this year to prepare for Brexit.
“The auto industry association ACEA has estimated that it could cost carmakers and suppliers 10 to 11 billion euros ($11.7 billion to $12.9 billion),” Peter said. “We need tariff-free trade. And even then, it needs to be seamless. We have a just-in-time manufacturing system so the administrative processing at customs needs to be efficient.”
He also suggested that Britain continue to keep pace with European Union emissions requirements so that carmakers can offer the same cars in all European markets.
“Strong demand for electric and hybrid cars has helped BMW stay ahead of projected fleet emissions reduction targets for 2020”, Peter added.
At this moment, BMW is on track to meet its full-year targets after a recovery in auto sales led by China helped the manufacturer overcome the COVID-19 pandemic.
Peter asserts that BMW will meet both its full-year forecasts and the European Union-mandated CO2 targets this year. He cited a boon from China, where car sales rose by a fifth in September compared to a year ago.
“The third quarter was much better than the second quarter, but with different speeds in different markets and regions,” Peter said to the reporters on a call.
The German carmaker has projected an automotive earnings margin, before interest and taxes (Ebit), between 0-3 percent this year, and for sales to be significantly lower than last year after the pandemic shut down both factories and dealerships. Earlier this week, the company said that deliveries of BMW-brand vehicles were down 11 percent this year through September.
Additionally, the company is trying to increase sales of EVs to meet emissions regulations in Europe which will get stricter in 2021. Peter said that he sees the company meeting those demands this year and next year.