BMW Boosts U.K. Spending as Part of Mini Growth Plan

BMW announces a £250 million ($387.5 million) expansion of its U.K. manufacturing operations by the end of 2015, even as the German auto maker considers diversifying Mini production away from its traditional base in Oxford.

BMW says the spending at its Oxford facility, steel-body pressings operation in Swindon and engine plant at Hams Hall near Birmingham, is to support its international growth strategy for the Mini brand.

The stepped-up output and the complexity of new model lines means BMW needs additional Mini production capacity beyond Oxford’s maximum capacity, and the auto maker is considering how to achieve this.

“Our preferred option is to establish a contract manufacturer (for) satellite production as close to our U.K. operations as possible, at Mitsubishi subsidiary NedCar’s plant in the Netherlands, with whom BMW is in discussions,” says Harald Krueger, BMW board member with responsibility for Mini.

“Oxford will provide special Mini production expertise for any new operation, particularly in dealing with the high complexity and customer individuality which Mini demands and in operating state-of-the-art, multimodel production lines.

“Just as Munich is the center of the BMW world, Oxford is and will remain the home and the heart of Mini.”

As the volume and variety of the Mini model lineup grows, there will be additional production requirements for engines and body panels from BMW’s specialist U.K. facilities in Hams Hall and Swindon, the auto maker says.

Part of the new investment is earmarked for development of production facilities tailored to meet those requirements.

BMW says the latest U.K. investment will support increasing volumes and up to 10 different models in the new lineup in the midterm, and is in addition to £500 million ($775 million) in U.K. spending announced in June 2011.

Krueger’s announcement comes during a visit to the Mini plant in Oxford, where he says BMW has invested £1.75 billion ($2.7 billion) in the U.K. since 2000.

“Over the last decade, Mini has been a unique global success and the BMW Group has even greater plans for the future development of the brand,” he says in a statement. “Plant Oxford has played a major role in this, with cars being exported to over 100 countries.”