BMW has told the BBC the cost of any new customs arrangements after Brexit would push up the price of its cars.

Photo: REUTERS

Ian Robertson, BMW's UK special representative, said new border systems and warehousing would add to the cost of making cars such as the Mini.

He said: "It's a potential risk... we would like to avoid."

But he said BMW would be forced to invest in new customs systems by late summer if there was no clarity on the UK's trading relationship with the EU.

He told the BBC's Economics Editor Kamal Ahmed that without clarity BMW would be forced in August or September to prepare for a hard Brexit and customs delays around a hard border.

Mr Robertson said: "Those dates at the end of the summer are quite real. That's when the contingency plans get applied, and that's when of course we need to see clarity."

But he added that BMW had no intention of moving its manufacturing operation outside the UK.

"We would have to start to think about how our trucks are going to be managed at the border and how our stocks are going to be stored around our factories," Mr Robertson said.

"It puts a burden on industry. It puts a burden on us to find ways around it, when ultimately we should be focussed on more constructive issues.

"Our customers have expectations as to the value in their cars. They see innovation and technology as having a value. I can tell you, I have never heard one that says there's a value in customs."

Japanese support

While the Society of Motor Manufacturers and Traders said that investment in the UK's car industry had halved in the last year because of Brexit uncertainty, some companies such as Toyota have continued to invest in the UK.

In a separate interview, Kōji Tsuruoka, Japanese Ambassador to the UK, told Kamal Ahmed that the UK still had a strong appeal for Japanese car companies.

He said: "The UK is an industrialised, very strong R&D supported economy, and there is flexibility in moving toward the future of the industry. The referendum result did not necessarily affect the attraction or the strength of the UK R&D high-tech basis, and you still see Japanese investment coming to those sectors of the UK economy.

"But when it comes to trade, and market availability, they will have to reconsider, if there is any obstruction for doing trade with a major market to which they export from the UK - and the EU market is certainly one of them. They will watch very carefully and very cautiously."

In May, BMW was part of a group of business leaders including the heads of BP, Nestle, and Vodafone, who told Theresa May at a Downing Street meeting that a trade deal with the EU must be "as frictionless as with a customs union".

BMW employs 8,000 people in its UK manufacturing operation and another 14,000 in its retailer network.

It manufactures Minis near Oxford, Mini body panels in Swindon, Rolls-Royce cars at its Goodwood plant and petrol engines at Hams Hall in Warwickshire.

Source: BBC