BMW to announce pounds 150m expansion of Mini factory

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The Independent Online
BMW, the German car giant, is to embark on a major expansion of its Mini factory in Oxford, which will involve investment of about pounds 150m and create hundreds of jobs.

The expansion is likely to increase the capacity of the plant to between 250,000 and 300,000 vehicles a year and follows soaring demand for the iconic car. Mini production last year reached nearly 190,000 after the introduction of a convertible version in the summer. But spare capacity at the factory has run out.

The bulk of the investment will be in a second paint shop to unblock what is the biggest bottleneck in production at the Oxford plant. There will also be a phased increase in assembly line capacity.

Details of the expansion will be unveiled in a fortnight by BMW's board director for production, Dr Norbert Reithofer, at a special event at the Oxford plant and will raise the German car maker's investment in the site to more than pounds 400m.

The Oxford plant has 4,500 employees and operates 11 shifts a week. There is a special weekend shift which has become popular with housewives and students keen to earn extra cash. An expansion in production capacity to as many as 300,000 vehicles a year could create more than 1,000 jobs, industry sources said.

Dr Reithofer is not expected to announce any new models for the plant but speculation has been rife that BMW will launch a sports utility version of the Mini at some stage and a five-door Mini traveller or estate.

BMW has spent pounds 280m on the Mini plant since it sold the remainder of the Rover car company to the Phoenix consortium in May 2000. It has also invested heavily in an engine plant facility at Hams Hall in the Midlands and a new factory near Chichester to produce Rolls-Royce luxury cars.

The German company's latest investment threatens to upstage MG Rover's plans to announce a strategic tie-up with the Chinese car maker Shanghai Automotive Industry Corporation. The agreement, which is vital to MG Rover's survival, had been due to be announced last month but has been delayed amid reports that the Government is putting together some form of aid package to sweeten the deal.

A spokesman for BMW confirmed that it was proceeding with substantial new investment in Oxford but declined to comment on the details of the expansion.

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