German carmaker BMW hinted it is prepared to move production of the Mini out of the UK if Britain's negotiations to leave the European Union leads to trade barriers.

BMW chief executive Harald Krueger said the carmaker was preparing for "different scenarios" depending on the outcome of the UK's Brexit talks with the EU.

Carmakers fear the introduction of export tariffs between the European bloc and Britain, making vehicle production in the UK expensive.

Car production is a crucial part of the UK economy, accounting for sales of just under £72bn last year and employing 814,000 workers, according to trade body the Society of Motor Manufacturers and Traders.

BMW's main factory for the Mini is in Oxford – in addition, the carmaker also has plants in Goodwood and Hams Hall, in Warwickshire.

The group, which also owns Rolls-Royce Motor Cars, employs around 18,000 in Britain and exports about £2.4bn of cars and parts from the UK.

BMW's Krueger, speaking earlier this week at the firm's Munich headquarters, said: "The UK remains an important location for us. Much will depend on how Brexit is ultimately negotiated.

"At the BMW Group, we are preparing for different scenarios. Our production network offers us flexibility. Mini models are also built at VDL Nedcar in Born in the Netherlands."

Investment fears

Last week Toyota announced it will invest £240m to upgrade its Burnaston plant, as carmakers continue to dominate the government's thinking ahead of Brexit talks, which British Prime Minister Theresa May said she will trigger on 29 March.

French company PSA agreed a £1.9bn deal to buy General Motors' loss-making European unit, including Vauxhall earlier this month, raising fears of job losses at Vauxhall plants at Ellesmere Port and Luton.

Reports have also suggested, this month, that Ford could lay off more than 1,100 workers at its engine plant in Bridgend by 2021.

Last October Japanese carmaker Nissan cast doubt over future investment in the UK as a result of the UK's Brexit vote.

Secret deals

But, after a meeting with the government, the firm decided to build its next-generation Qashqai and add production of the new X-Trail model at Britain's biggest car plant, securing more than 7,000 jobs and 28,000 more in the supply chain.

Nissan's boss, Carlos Ghosn, said the company's decision was driven by government "support and reassurances".

The details of the meeting have never been disclosed, but the government denies it cut the carmaker a special deal.