Mini production plan is second lift for the UK car industry in 24 hours

THE British motor industry delivered its second boost to the economy in as many days yesterday as BMW announced plans to build its next generation Mini in this country.

The German car giant said it will make a fresh investment of 500 million to build the new Mini coupe and Mini Roadster models in the UK.

The news followed an announcement on Wednesday by Nissan that it was investing 192m to build the next version of its Qashqai model in Britain. Both announcements safeguard thousands of jobs.

Business leaders, unions and the government welcomed the development, which the Prime Minister said was a "tremendous vote of confidence" in BMW's UK workforce.

The Mini coupe will be launched later this year and the Mini Roadster in 2012, both produced in Oxford, where more than two million Minis have been built since 2001 - three-quarters of them for export.

BMW's latest investment will also benefit a pressings plant in Swindon and its engine plant at Hams Hall near Birmingham.

The company said it had invested 1.5 billion in the UK since 2000.

BMW group chairman Norbert Reithofer said: "This investment underlines that the UK will remain the heart of Mini production."

The announcements by BMW and Nissan signal a renewed confidence in the UK motor industry, which produces the country's most valuable manufactured exports, with 27bn worth of vehicles and parts going overseas in 2010.

BMW's 2.4bn-a-year exports of cars and engines account for about 1 per cent of all goods exported by UK companies.

Paul Everitt, chief executive of the Society of Motor Manufacturers and Traders (SMMT), said competition to secure work on new models was always fierce.

"What they've committed to is the next generation of vehicles for the Mini and the Qashqai which effectively will guarantee these plants for another decade," he said.

"Everybody wants this investment. Every country in Europe and developing parts of the world wants investment from major automotive manufacturers because it means high value, good quality jobs over a long period of time. Every time there is a new model in the offing the competition is intense."

Recent years have been tough for car makers in Britain, with the number of new cars sold falling for 11 consecutive months to May.But things seem to have taken a turn for the better with General Motors making their new van in Luton, and Ford committing to investing 1.5bn in research and development in Britain.

Everitt added: "What we are seeing is a re-commitment by major vehicle manufacturers to their production facilities in the UK.

"If you're one of the tens of thousands of people working in this business today you will feel an awful lot more confident about your future than you did yesterday or the day before."

Everitt said he was "optimistic" about the future for car makers in the UK, and that the demise of British-owned firms was irrelevant.

"The UK is a major part of the global automotive industry. I don't see the manufacturers who operate here as being anything other than part of the UK economy. So I'm not sure that this whole question of ownership is a relevant one," he said.

"All these manufacturers are multi-national, the most important thing for us is that they feel happy and confident to invest in the UK."