BMW Group has delayed the development of a next-generation Mini Cooper, citing a need to reduce cost and comfortably navigate Britain’s trade relations with the European Union after Brexit.
Considering Europe has had since June of 2016 (when the referendum took place) to figure all this out, it feels silly that the region is still in a panic. Yet that’s reality in which we live. Despite the United Kingdom voting to withdraw from the European Union years ago, the decision received an immense amount of pushback. Negotiations stalled, arrangements went unmade, and the UK eventually voted in a gaggle of Conservatives in the last election — giving them a strong majority in Parliament.
That new political makeup, which includes Prime Minister Boris Johnson, meant Brexit could finally happen. But it doesn’t undo the wasted years that failed to produce a comprehensive trade deal between the UK and EU, or the resulting complications.
While Mini brand sales fell over 4 percent last year to 346,639 cars, the company owes about a third of those deliveries to hatchback sales in Europe. But Cooper models have been chilling on the ULK1 platform since 2014, encouraging parent company BMW to start development on its replacement before the car grew too stale.
Unfortunately, developing a new platform is expensive, requiring an automaker to set aside roughly $1 billion in cash. Mini’s hatchback is an important model, but it’s not a global success. Sales in the United States dwindled to just 8,462 units in 2019, fewer than Europe manages to move in an average month.
Consumers continue to trend into larger vehicles, making the model less appetizing to pursue in the long term. However, with environmental regulations perpetually on the rise and BMW making promises to further electrify the Mini brand, an updated Cooper could also make for a nice compliance vehicle people would actually purchase. It’s an issue BMW still needs time to figure out as it works on a €12 billion ($13.3 billion) restructuring plan slated to wrap by 2023.
To get there, the German company says it must reduce the number of available vehicle configurations and tamp down development costs — the latter of which will be exceptionally difficult to pull off, as automakers collectively scramble to break into the electric vehicle market.
“The lifespan of [the ULK1] platform has been extended,” BMW spokesman Maximilian Schoeberl told Reuters. “For cost reasons and because of Brexit.”
From Reuters:
The Mini is currently built in Oxford and in Born, the Netherlands, and any next generation car would require investments into the production lines of both factories.
BMW will not make large scale investments until there is greater certainty over the outcome of negotiations between Britain and the European Union over a trade deal.
“If tariffs are in the range of zero and 5 percent, the business case would not dramatically change,” BMW Chief Executive Oliver Zipse said last year, referring to Oxford’s status as a production and export hub for the Mini.
But higher tariffs on exports to and from Britain may force BMW to consider shifting more production to the Netherlands.
One silver lining is that BMW’s cost cutting actually seems to be working. In November, it reported a 33 percent improvement in third-quarter earnings (pre-tax). “The efficiency-boosting measures we have implemented are bearing fruit,” said CFO Nicolas Peter, noting that the automaker was performing exceptionally well considering the general state of the automotive sector. That comes after a profit warning which presumed 2019 would be overwhelmingly difficult, suppressing pre-tax profits by an estimated 10 percent due to global trade complications.
Expect an update on Mini’s development status later this year. The United Kingdom will officially be out of the EU on Saturday, entering an 11-month (perhaps more) transitional period where real trade negotiations will hopefully take place.
“The most important thing to say tonight is that this is not an end but a beginning,” Prime Minister Boris Johnson said in a statement on Friday. “This is the moment when the dawn breaks and the curtain goes up on a new act.”
[Image: BMW Group]
People are just…..tired and fed up with Brexit.
Like a long and bitter divorce battle, in which one essentially just wants to continue with the rest of life, the warring parties can and will make concessions which originally had been thick “red lines”.
How these concessions will affect the remains of the once mighty British automotive industry, is yet to be seen.
People are tired and fed up with the people who delayed it.
If the European Union would limit itself to economic matters, especially trade, it would be a howling success. However, it wants to be the central government of a United States of Europe. Brexit is the British people’s reply of, “You can stick that back where the sun doesn’t shine.”
It wants to control every aspect of everyone’s lives. Micromanagement on steroids.
hasn’t the Mini been dying off?
when it was novel people beat a path to their doors, now, not so much
at least here in the US
They also have a reputation for poor reliability in the US.
Former mini owners have expensive sob stories that they’re willing to share.
…As do most German cars when you take off the marquee brand badge…
At least now Boris Johnson has a firm enough majority to get an agreement through Parliament. Before the last election there was no point in trying to negotiate a deal when no deal could ever win approval anyway.
it is funny watching those old morons slowly realize they can’t just flip the EU the bird and expect things to go on as they were before.
Can’t play hardball if you don’t have the ball.
Lol you guys brainwashed by far left biased media (that think it isn’t biased) are cute. Let the adults handle things bud.
“you’re stupid for believing what those people tell you. I’m smart for believing what these people tell me.”
Dr. Kevorkian was way ahead of his time.
Boris is a complete toad, and the one thing his “classical” education in Greek drama hasn’t taught him is anything about manufacturing. The car makers in England have been lobbying the Tory government even before Bozo got in as PM about JIT and supply line problems at real Brexit, for over two years now. Might as well have been talking to a wall, because those right wing ideologues couldn’t have cared less or been less interested.
Nissan, Honda (who said eff this and are leaving the UK), Toyota and BMW with MINI have all warned the Conservative government that some real border preparations needed to be in place to keep production flowing. Or they might not invest or even pull out of the place. No go. Deaf. So here’s the proof from BMW that if you’re as dumb as two rocks like Boris, investment in English manufacturing will decline.
So don’t blame the EU. Put the blame on self-immolation where it belongs – the Conservatives in the UK and the dopes who voted them in. I was born there – have kept an eye on the slide to nonentity status the Brits have inflicted on themselves. As a sovereign nation, they’re looking at a falling standard of living because friends? They have none. Their new trade deals when they negotiate them will suck. Being lectured at by an eloquent right wing English bore is not appreciated by many outside the country who see no reason to give Boris a great deal.
I was born in England, so feel entitled to being annoyed at the return of the aristos ordering the serfs about and flushing the country down the drain.
I wonder how much fun we will have if Germany decides to leave EU – Gerxit. True this event is as impossible as Russia deciding to leave Soviet Union.
Germany and France are the backbone of the EU. They were before Brexit, and they remain so today.
If either of them leaves, then the EU would collapse.
But a big feature of Germany’s modern culture is NOT wanting to repeat the moral horrors and national shame of WWII, and the EU is a big part of how they accomplish that.
I don’t see Germany leaving.
Germany IS the EU. Even France seems to be going along with the creation of the IV Reich. It’s just a progression from the Holy Roman Empire, on to The Third Reich, then the EU.
Congrats to Britain on regaining its independence, it’s going to be a long road forward but detaching itself from the sinking EU was the only chance this country had to prosper. I’m sure several other countries strangled by the EU are watching closely.
“ However, with environmental regulations perpetually on the rise and BMW making promises to further electrify the Mini brand, an updated Cooper could also make for a nice compliance vehicle people would actually purchase. It’s an issue BMW still needs time to figure out as it works on a €12 billion ($13.3 billion) restructuring plan slated to wrap by 2023.
To get there, the German company says it must reduce the number of available vehicle configurations and tamp down development costs — the latter of which will be exceptionally difficult to pull off, as automakers collectively scramble to break into the electric vehicle market.”
Oh, yeah! and Brexit!! Don’t forget Brexit!!
People are just…..tired and fed up with Brexit…..and impeachment, both the USA and The UK will be made great after these silly processes will be over. Both Political charade shows that we’re dreamed up by left wing .gov types to legitimize the further fleecing of their respective productive classes.
Brexit should have happened years ago, swiftly. The Blair Govt. was to busy propping the status quo with a fake war. Churchill said Britain will always turns to the open seas not the Continent.
God Bless Donald J. Trump, The United States of America, Nigel Farage and the Anglo American Alliance!
Amen.
Truth.
“Leave me out of this, please.”
– God
”God Bless Donald J. Trump, The United States of America, Nigel Farage and the Anglo American Alliance!”
Umm, no.
I’m too irate to up with any polite and concise way to explain the problems with these leaders and what they stand for, so I’ll just settle on a solid “no” so that all y’all know there are people who disagree with this.
The last person any god would bless would be Donald J. trump.
that Evangelicals just love a guy who is the living embodiment of the seven cardinal sins shows what utter worthless hypocrites “christians” are.
Love it when the losers are so mad they continue on crying like babies for YEARS on end, and in the process do so much damage to their own party that the person they hate so much is a shoe-in for the next election. I URS SMURT.
@Caddy, Do you realize that for most of its modern history, England’s foreign policy priority was to prevent one power from gaining control over continental Europe? Be it Spain, France or Germany. England attempted to create coalitions to counterbalance any one nation from gaining control.
By withdrawing from the E.U. they have abandoned this policy. Germany will develop hegemonic economic control over the continent.
Unless Putin first gains military control. Particularly over Eastern Europe and restores the Russian/Soviet Empire. Which has long been his stated goal.
And Scotland which historically was allied to France, against England, is now more than ever inclined to leave the UK.
And yes there is a considerable legal and political difference between England, and the UK. Something that publicly seemed to confuse the current POTUS.
The lack of historical knowledge among many, is indeed staggering.
Particularly when their major sources of information are ‘alternate’ websites.
“ Particularly when their major sources of information are ‘alternate’ websites.”
CNN, MSNBC, NY Times, Washington Post etc, are alternative sources, the bias and propaganda is so thick it can be cut with a knife.
I’d enjoy you to list some “good” sources. Particularly since Canada seems to be nationalizing it’s news for their own state owned propaganda.
News sources that have fact checkers, abide by a Code of Conduct, and actually provide the names and credentials of their reporters are more reliable than ‘underground’/alternate sites.
And heritage independent, national public broadcasters, who are not reliant on advertising revenue or ratings, have historically provided fairly accurate reports.
For example the British, Canadian and Australian Broadcasting corporations.
So your final comment is a little off base in that the CBC has provided a national news service for over 80 years. You may have heard of some CBC employees, Peter Jennings, Alex Trebek and Lorne Michaels?
Although I still get a chuckle out of the original Men in Black when he buys the tabloids to conduct ‘research’ into aliens on earth.
“ News sources that have fact checkers, abide by a Code of Conduct, and actually provide the names and credentials of their reporters are more reliable than ‘underground’/alternate sites.”
Where do these exist? You mention BBC they’ve been caught in many cases of extreme bias or outright propaganda lately; such as publishing this little nugget
https://i.redd.it/4ehp8y57he541.jpg
Or BBC: “Whites are not indigenous to Europe”?
I strongly prefer to trust smaller news agencies that provide actual video/audio based evidence as well as first hand sources that are actually interviewed.
Not dumb crap that American mainstream media uses such as “sources close to “person x” say” that’s clearly not credible evidence but it’s being used quite frequently by the dying old guard media as “proof”.
“who are not reliant on advertising revenue or ratings“
Who funds them then? Requiring subscriptions for online news or selling newspapers is not enough to support a news organization. Canada main news corporation was just bailed out by their government.
This being TTAC, and despite having U.K. ancestry, I’ve never had a desire to buy their cars. Their auto industry is either going to continue to be owned by outsiders and or it’ll be niche insignificant . And Brexit will give them a fine arse experience.
https://www.bbc.com/news/business-50240771
Brexit – good luck with that, no one else cares.
I don’t think a manual transmission is even available on the Mini anymore, what the heck. And it’s not even mini anymore, the car is no longer distinctive and unique. And a 3-cylinder engine is standard, that no one asked for. BMW is doing this to themselves. Might as well kill it now and get it over with. And no one wants a 30-35k mini that weighs 3000+ lbs and has a range of 150 miles. BMW sucks.
you’re right – just checked the MINI site and no more 3 pedal cars at least in the traditional 2 door MINI.
I get that they are fringe sales, but still.
It’s amazing that by the time I’m old enough with enough spare cash to ponder a new car, there is almost nothing left that I’d want to buy – I don’t care about top speed, just something that’s entertaining. I’m think the Golf/GTI/R is all that’s left, or possibly a BMW e90 or e82 but they date back to 2011.
Time for companies based in the EU to show the UK that actions have consequences and shutdown their UK manufacturing. It is not like UK labour is cheaper or their work so much better than those based on the continent. They are no longer beholden to the UK for anything.
I would have supported Brexit if I was in the UK, but I completely understand the arguments against it.
I’d rather be a sparrow cold and hungry but free, than a kept canary in a gilded cage, but that’s just me.
Regardless of which way it went however, I hope all sides can work something out, and I’m never want to ‘get them’ or ‘punish them’ because they didn’t vote the way I wanted them to. I wish both the EU and UK best of luck!
‘Europe’ has, in fact, been preparing ever since Brexit was voted on in a referendum. Hundreds of customs officers have been hired in the Netherlands (which moves a lot of goods between Europe and UK) alone. Guidelines have been published on the procedures after Brexit takes place.
It’s the UK that hadn’t bothered to get its ass in gear.
US had its own Brexit moment in 1776. Liberals (Canadians) were yelling that US is doomed parting ways with British Empire. And that’s how it went – now US is the world’s only remaining superpower and British Empire is no more.
China is the world’s remaining superpower.
The US has been giving up it’s international diplomatic dominance since 1/20/2017, due the current leadership’s cluelessness and general disdain for diplomacy in any form.
I was born in a very different America than I live in now, and I’m adapting. But a lot of this decline was avoidable.
Luke42 you need some education. There no more idiotic statement that China had become world’s only superpower. They cannot even project military power beyond their shoreline, even to Taiwan, and their unelected dictator for life is hiding his head in the sand while country sinking more andd more deeply into serious economic crisis. No country in the world want to do anything with China. While Trumps support even in Europe is on the rise.
@Inside: that is also historically incorrect. The Canadians (what we now call Quebecois) were unwilling to join the rebels because they feared losing their rights under the Quebec Act.
Loyalists joined them in British North America. Including the 3,000 freed slaves that Carleton refused to surrender to the Americans, as they would have been returned to slavery. Instead Carleton negotiated their safe passage to Nova Scotia. Recorded in The Book of Negroes.
Brexit aside UK, please don’t get rid of your “Elf and Safety” campaign. Like the gnomes in Iceland, I love the safety elves. And the Druids at Stonehenge.
And now China is the rising superpower and the USA is slowly declining after Imperial overreach. It is the Circle of Life.
Garbage in, garbage out. Brexit is an intellectually and legally incoherent concept, and confusion is the only possible reaction to it among businesspeople. I feel sorry for all the UK businesses that are going to see everything grind to a halt until the government staff and lawyers on both sides who actually have technical knowledge of trade are able to tune out BoJo’s bleatings and figure out how this will actually work.
Remember that, while we’ve known “Brexit” was coming since 2016, we didn’t even have a rough idea of what Brexit actually meant until the most recent agreement was reached just three months ago. Now we still have only a rough idea, and it will take a couple of years to develop that into something refined enough for businesses to write contracts around.