BMW is set to expand its Mini production facility in the UK.

BMW will increase its investment at its Mini plant in Oxford as sales continue to increase. This goldmine brand has become a major part of the manufacturer’s expansion strategy, having exceeded all expectations. The Mini brand could well prove to be the perfect advertising tool for the whole BMW marque.

BMW’s Oxford factory, where the car is built, has almost reached its 180,000 car annual capacity after worldwide sales in 2003 increased by 21% to reach 176,000. The first four months of this year are also positive, with sales up by 8% over same period of 2003. Nearly three years after it was relaunched, the Mini has been an overwhelming success, and now BMW is set to announce an expansion of the manufacturing base to cope with demand.

It is not the first time that BMW has been forced into action to deal with the Mini phenomenon. In 2002 it invested an additional GBP50 million to develop the plant’s infrastructure and introduce its Mini Cooper S model.

Despite urging the UK government to join the euro last year, claiming that future investment in the country from the group might be compromised, BMW is still spending heavily to widen its range and maintain sales momentum.

The strategic Mini brand, which covers a key segment currently below BMW’s smaller models, has obviously become an important part of the manufacturer’s expansion strategy.

The Mini brand has proved invaluable to the German auto giant, as it has provided it with an opportunity to grow into new markets and attract buyers who may not otherwise buy a BMW. Similarly, the success of the Mini in the US, its second biggest market after the UK, has also been a means of enhancing the image of the ‘parent’ BMW range in America.

This latest investment is equally necessary for BMW’s ambitious plans to expand the Mini series, with possible new models including a five-door traveller or estate version. Using technology and engineering usually only applied to bigger and more expensive vehicles, BMW has created a profitable range of Mini models and positioned them as affordable smart and glamorous vehicles. If its record is anything to go by, the Mini adventure will continue for sometime yet.

SOURCE: Datamonitor COMMENTWIRE (c) 2004 Datamonitor. All rights reserved. Republication or redistribution, including by framing or similar means, is expressly prohibited without prior written consent. Datamonitor shall not be liable for errors or delays in the content, or for any actions taken in reliance thereon.