BMW to invest 250 million pounds on Mini in Britain

FRANKFURT Mon Jul 9, 2012 2:50pm BST

BMW luxury car logo's are pictured in a spare part store at a BMW garage in Niderwangen near Bern, May 24, 2012. REUTERS/Pascal Lauener

BMW luxury car logo's are pictured in a spare part store at a BMW garage in Niderwangen near Bern, May 24, 2012.

Credit: Reuters/Pascal Lauener

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FRANKFURT (Reuters) - German carmaker BMW (BMWG.DE) will invest 250 million pounds ($388 million) over the next three years to increase capacity at the British manufacturing plants where it makes the Mini.

The world's largest luxury carmaker said on Monday the investment would support its international growth plans for the Mini, which will expand its current line-up of seven models to include up to 10 different body styles in the medium term.

BMW will use the money to ensure its engine plant in Hams Hall in the West Midlands and the steel pressing facility in Swindon in south-west England can produce additional motors and car body panels.

The investment will safeguard the 5,500 jobs at BMW's three UK Mini plants, but no new jobs are expected.

UK Business Secretary Vince Cable said: "The investment of 250 million pounds in addition to the 500 million last year demonstrates BMW's commitment to the UK and safeguards jobs for the future."

Carmakers have been increasingly willing to maintain or expand their UK operations. General Motors (GM.N) spared its Vauxhall plant in Ellesmere Port from European cutbacks.

Nissan plans to build a new model in its Sunderland site, while Honda (7267.T) will double its car output in the UK this year.

BMW is also considering whether to build Minis in another European location apart from the UK and also Graz, Austria, where third-party carmaker Magna Steyr (MG.TO) currently builds the Mini Countryman sport utility vehicle.

"Our preferred option is to establish a contract manufacturer as a satellite production as close to our UK operations as possible, at the Nedcar plant in the Netherlands, with whom BMW is in discussions," Harald Krueger, a member of BMW's management board responsible for the Mini brand, said.

Last month, BMW said it was in talks with NedCar, which belongs to Japan's Mitsubishi Motors (7211.T).

The Mini has been a big success story for BMW ever since it revived the brand in 2001, growing sales volumes by 21 percent to more than 285,000 cars last year.

The Mini range currently includes the traditional hatchback, the Clubman estate, Countryman offroader, Coupe, Convertible, Roadster and Clubvan transporter. The Mini Paceman, which blends characteristics of an SUV with that of a coupe, will be the brand's eighth variety.

(Editing by Dan Lalor and Jane Merriman)

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