BMW will produce a new small car at its Regensburg, Germany, plant beginning in 2004.

Regensburg, which builds the 3 series, is currently running at full capacity.

The company also plans to build a plant to provide extra capacity needed to accommodate the sub-3 series model. The new plant may be built in central or eastern Europe.

Within the next decade all central European countries will be members of the single European market, and therefore all countries stand a good chance of getting involved with this project.

A decision on the location of the new plant and which models it would produce will be made by next summer.

As yet, there has been no confirmation from BMW in relation to the concept of the new model, but it seems very likely it will compete at the upper end of the lower-medium segment. That area is currently dominated by the VW Golf and Audi A3.

The new car will be aimed mainly at the European market, but may be sold in the USA.