It came as a relief to the UK government when German car company BMW announced that it will build the first fully Electric Version of its three door hatchback dubbed BMW Mini at a factory in Oxford. This announcement has acted as a "vote of confidence" for the British government after its decision to exit from the European Union, which in return will affect its trading arrangements.

Why has BMW agreed to invest in a different country?

Roughly 60 percent out of 360,000 Minis are built in Oxford and UK single-handedly sums up 20 percent sales of the Mini, which makes is the biggest market for the three door hatchback model.

A spokesperson from BMW said that it wasn’t a good idea to manufacture the electric motor in Oxford due to the obvious trading instability which comes post-Brexit. Since there were no major changes in the design model of the Mini, it doesn’t need to be redesigned from the ground up. Hence, it is comparatively a smaller investment to build the Mini in the same factory, so that there is no need to build a new factory.

BMW has decided to assemble the electric parts of the new three-door Mini model, which includes the drivetrain; motor, gearbox and the battery pack in plants based in Germany. These electronic parts will be assembled in the car at the factory in Oxford.

Has there been any reassurance from the UK government post-Brexit?

The German car giant hasn’t received any reassurance from the British government as of yet. Though the announcement to start the mini factory in Oxford is going to be a major boost for the British car industry and will provide major relief to the government after their exit from the European Union.

The new fully electric Mini would start getting manufactured in 2019, just a few months after UK’s exit from the European Union. And then only time will tell if Britain is a good enough export hub for the German car company. BMW has already built up a plant in the Netherlands after they were speculating their trade relations with the UK.

According to Greg Clark, the Business Secretary of UK, after BMW’s announcement to invest in their Oxford plant, the UK will become the hub for the next-generation of cars. Another major car brand, Nissan will manufacture their new models Qashqai and X Trail in the UK along with Japanese car company Toyota, who have agreed to get their business to Britain as well. Clark also suggested that the country is planning to invest in the development of battery technology as well. However, the true test will be next year, if the car companies are willing to invest in the country where they will build their brand new models from the ground with new designs.