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Last Updated: Wednesday, 16 February, 2005, 10:00 GMT
BMW cash to fuel Mini production
By Jorn Madslien
BBC News business reporter at the Mini factory in Oxford

Mini convertible
The new Mini has gone from strength to strength
Less than four years after the new Mini was launched, German car maker BMW has announced 100m of new investment.

Some 200 new jobs are to be created at the Oxford factory, including modernised machinery and a new body shell production building.

The investment aims to raise output by 20%: production could exceed 200,000 cars by 2007, from 189,000 last year.

The increase is in response to rapidly-rising demand and could help wipe out waiting lists.

Before Wednesday's announcement, BMW had invested some 280m in Mini production.

Raised targets

Since its launch during summer 2001, the new Mini has gone from strength to strength.

Mini production
The Cowley factory is increasingly being put to good use

Last year, almost one in six cars sold by the BMW group was a Mini.

The company admits that the success of the brand came despite scepticism from many in the industry.

"Our decision to produce a new Mini was not received well right away," said Norbert Reithofer, a member of the BMW management board.

Initially, BMW said it would produce 100,000 Mini models a year at its vast Cowley factory on the outskirts of Oxford, but the target was quickly reached, then raised, time and time again.

Not everyone is convinced that the boom can continue.

"The risk is that after they've invested massively in the brand, demand tapers off like it did with the new VW Beetle," said Brad Wernle, from Automotive News Europe.

"Of course the day will come," Mr Reithofer said.

"But we will have ideas. It's not just a one-trick pony."

Holding value

The price of the car has also gone up. When it was launched, the cheapest Mini cost just more than 10,000.

These days, buyers will have to fork out almost 11,000 to own a new Mini One, or even more for the Cooper S which costs up to 17,730.

The Mini Convertible, which was launched last spring, costs up to 15,690 for the top model, and there is even a waiting list.

Second-hand Minis are not cheap either. A Mini One bought when the model was launched should still fetch at least 8,000 for the cheapest model, while a used Cooper S is likely to be priced from 12,556, according to the-car buying website Parker's.

The consumers' association Which operates with slightly different numbers, yet it confirms that the Mini Cooper 1.6 depreciates more slowly than any other car, other than the Mercedes Benz C180 SE and the BMW 1 Series 116i SE.

Efficiency improvements

The Cowley factory, which initially seemed far too large a production plant for just 100,000 Minis, is increasingly being put to good use.

Mini Cooper S
The Mini Cooper depreciates more slowly than most other cars

There are plans to tear down old buildings and build new ones and construction efforts have already begun.

BMW's Mini adventure has made good much of what went wrong during its stewardship of the UK car maker Rover which it sold for 10 five years ago to the Phoenix consortium.

In 1999, when BMW still owned Rover, the Oxford factory was producing the award-winning Rover 75. During that year, 3,500 people produced 56,000 cars. Last year, in the same factory, almost four times as many vehicles were produced by just 4,500 Mini-workers.

The Mini factory's current output is equally impressive when compared with the main Rover factory in Longbridge, which in 1999 produced 180,000 Rover cars.

Last year, MG Rover, which employs more than 6,000 people, produced just 110,000 cars, though it hopes to land a deal with Shanghai Automotive Industry Corporation (SAIC) that could help double the number of cars produced at Longbridge.

Indeed, Mini is not only producing more cars than MG Rover does; it remains ahead even when the current sales of Land Rovers and Range Rovers (which are made by the former Rover unit that BMW sold to Ford) are taken into account.

What gives the small car such big appeal?

Mini workers help transform firm
29 Jun 04 |  Business
A new life for the Mini
22 May 01 |  Business
New Mini on sale
07 Jul 01 |  Business
BMW drives record sales in Asia
16 Feb 05 |  Business
MG Rover's Chinese future
22 Nov 04 |  Business

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