BMW poised for major expansion at Mini factory

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The Independent Online

The German car maker BMW is close to deciding on a major expansion of its Mini plant in Oxford to cope with booming demand for the iconic car.

The German car maker BMW is close to deciding on a major expansion of its Mini plant in Oxford to cope with booming demand for the iconic car.

Production this year is expected to exceed 180,000, boosted by the launch in July of a convertible version of the car. But output cannot grow much beyond that because the plant's paint shop is already working almost at full capacity.

BMW executives have ambitious plans for further variants of the Mini, ranging from a sports utility model to a five-door Mini traveller or estate. They believe there is no reason why the brand cannot be extended in the same way that the BMW marque itself has grown to encompass a wide variety of models.

Michael Ganal, the BMW board member for sales and marketing, said the group was now "pretty close" to a decision on the expansion of Oxford. He said: "When we began production in 2001 we had installed capacity of 100,000. We are now at 180,000 and that is the maximum output. The paint shop is clearly the limiting factor.

"We believe the Mini family has to grow. The key prerequisite for any new variant is that it fits into the family and mirrors the Mini philosophy."

BMW has so far invested a total of £280m in Oxford but the addition of a second paint shop and new assembly facilities could easily raise that figure closer to £400m. The plant's 4,500 employees currently work 11 shifts a week.

There had been speculation that the company may build a second Mini production facility overseas, possibly in the United States, which is now the second biggest market for the car outside the UK.

But Mr Ganal said there would be no overseas production "not today, not tomorrow", adding that Oxford was the home of the Mini.

BMW transferred production of the car to Oxford from the Longbridge plant in Birmingham four years ago when it sold MG Rover to the Phoenix consortium.

Worldwide sales of Minis last year reached 176,465 and in the first four months of this year sales are up by a further 8 per cent on the same period in 2003. BMW expects the new open-top version of the Mini to account for about 20 per cent of sales, with the UK accounting for 6,000 convertibles this year and 8,000 next.

Prices for the Mini One convertible start at £13,325 - some £2,500 more than the hard-top version - rising to £14,625 for the Mini Cooper convertible. However, if sales of the hard-top are any guide then the prices paid will be much higher than that.

On average, £1,700 of optional extras are ordered on every Mini which leaves the Oxford plant.

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