BMW Group has delayed the development of its next-generation Mini models. The delay comes as BMW aims to cut costs and amid uncertainty surrounding Brexit. Both issues, combined with slow sales, have cause the German automaker to reprioritize.
Mini was acquired by BMW Group back in 1994 from Rover Group. Since then BMW has developed three generations of Mini cars, with the current one being on the market since 2014. Mini’s current lineup is underpinned by the UKL1 architecture, which also underpins the BMW X1.
“The lifespan of this platform has been extended,” BMW spokesman Maximilian Schoeberl told Reuters. “For cost reasons and because of Brexit.”
BMW isn’t the only global automaker seeking to cut costs. Rival Mercedes-Benz has announced restructuring plans as well as automakers seek to free up cash to make the massive investments required for electrification and autonomous vehicles. Global trends away from small cars make Mini an obvious choice to rob some capital for electric vehicles.
Mini sales were down 4.1-percent globally in 2019.
Shifting development costs to other parts of the business isn’t the only reason Mini is seeing delays. BMW currently builds the majority of its Mini models in the United Kingdom. With uncertainty surrounding the direction Britain will take regarding trade agreements with the European Union, BMW is finding it difficult to make significant investment decisions.
BMW has said if tariffs between Britain and the EU remain fairly low, it won’t likely impact their long-term decision-making process for the Mini facility. If tariffs end up greater than five-percent, that could impact Mini’s future further.
Mini’s are also produced by contract builder VDL Nedcar in Born, the Netherlands. If tariffs end up being significant between Britain and the EU, BMW may have to make arrangements to shift more production to the Netherlands.
On average, it takes about 1 billion euros to produce a new vehicle architecture, a process that takes about six years. It isn’t entirely clear how long this delay will impact next-generation Mini models.