BMW secures future of Mini factories with investment

Image Commercially Licensed from: DepositPhotos

BMW, a leading manufacturer of automobiles in Germany, is anticipated to reveal plans to invest hundreds of millions of pounds to equip its Mini factory near Oxford to produce a new generation of electric vehicles.

At the Cowley factory, two new electric Mini models are scheduled to go into production in 2026.

The change is anticipated to secure the facility’s viability as well as the future of another business in Swindon.

At the moment, more than 4,000 people are employed by the two locations.

BMW is anticipated to announce that it will spend £600 million modernizing the Cowley facility, expanding its body shop, and establishing a new space for installing batteries.

Additionally, it has plans to expand the Cowley and the Swindon factories where body panels for new cars are produced.

This will enable Cowley to produce both conventional vehicles and two next-generation electric models, the Mini Cooper and the bigger Mini Aceman.

The Countryman, a third electric vehicle, will be produced in Germany.

The government’s Automotive Transformation Fund, estimated to be worth £75 million, will support the UK investment.

The future of the two UK facilities depends on BMW’s decision because the Mini brand is anticipated to go all electric by 2030.

2019 saw the Cowley facility introduce the first electrified Mini.

However, the corporation said last year that manufacture of the majority of its electric vehicles would relocate to China, where the new models had been created in collaboration with Great Wall Motor.

BMW said that it was inefficient to produce both conventionally fueled and electric vehicles in the same factory at the time.

This strategy has obviously changed since then.

The new models will be produced starting in 2019 at Great Wall’s factory in Zhangjiagang; Cowley is now anticipated to begin producing them in 2026.

BMW’s investment, according to Prime Minister Rishi Sunak, is “another shining example of why the UK is the best place to build cars of the future.”

Business and Trade Secretary Kemi Badenoch called the development “exciting” and said it will ensure the sector “continues to be buoyant” on the BBC’s Radio 4 Today program.

This is the most recent in a line of government-sponsored projects aimed at advancing the manufacture of electric vehicles in Britain before a ban on the sale of new gasoline and diesel vehicles is set to go into force in 2035.

The Indian company Tata, which owns Jaguar Land Rover, said in July that it would construct a sizable “gigafactory” to create batteries in Somerset. The project is anticipated to get hundreds of millions of pounds in taxpayer subsidies.

In Cheshire, Stellantis has just started making electric vans at its Ellesmere Port facility. Nissan is increasing production of EVs at its Sunderland facility, and its partner Envision AESC is constructing a gigafactory nearby.

Ford is also making significant investments in its Halewood facility to get it ready to produce electric motors.

The good news

However, there have also been setbacks for the sector in recent years, such as the closure of Honda’s Swindon factory in 2021 and Ford’s Bridgend engine plant in 2020.

Britishvolt, which had intended to construct a battery manufacturing close to Blyth, entered administration in January. The site’s future is still up in the air.

The BMW announcement, according to Birmingham Business School professor of business economics David Bailey, will be “very good news” for the UK sector.

In his opinion, car companies have been taking advantage of the government’s perceived weakness as it seeks to attract new investment in the sector following Brexit, according to German expert Matthias Schmidt.

The Mini brand, with its strong British identity, should be produced in the UK, he continues, even though it could be less expensive to do so elsewhere.

Where the batteries for the cars to be constructed in Cowley will come from is still a mystery.

That might still develop into a serious problem. New regulations will make it such that vehicles with batteries built outside of the EU or the UK will be subject to high import duties beginning the following year.

BMW is one of many companies that have lobbied the EU and the UK to delay or weaken the regulations.

Read Also: The rise of TikTok macro influencer