Car manufacturing in the UK had an incredibly successful year in 2012, with multi-national investments and huge sales increases making the sector one of the few posting profits in the country.
However, experts have warned that issues such as a lack of skilled workers, little room to expand existing plants and only a small amount of investment from the government could limit the progress of the industry in the future, with the early warning signs of this prediction already beginning to materialise.
BMW have revealed that the iconic British Mini, which is owned by the German car manufacturing giants, will “go Dutch” in the future, with a percentage of production to be moved from the UK to Holland.
Contract assembler Nedcar, in Born, will take over the production of certain models, but BMW chief executive Harald Kruger insists that Oxford will always be the home of the Mini brand.
The micro cars are seen as a symbol of the UK internationally, largely thanks to hit film The Italian Job starring Michael Caine. Due to the creation of several new models and a revamp of the exterior, the cars have recently boomed in popularity worldwide, with sales reaching a record breaking 301,526 vehicles last year.
This popularity has led to a need for more space on the Mini production line, and unfortunately the current UK site will not allow for the production volume required to keep up with the increasing international demand.
Mini’s UK headquarters are based at the old Rover plant in Oxford, which has now almost reached full performance capacity and has run out of room for expansion – hence the need to look further afield.
Mr Kruger believes that this move will allow the British brand to expand yet further on an international platform whilst negating the need to spend on the construction of a whole new plant to suit the firm’s production requirements.
Speaking of the upcoming change, he says; “We have not decided yet which models we will produce in Holland but we definitely need the additional production capacity.
“It gives us the necessary flexibility to increase or decrease production and move model lines around if necessary – it also makes more sense than investing in all new facilities around the world.
“Production capacity is something we have to monitor all the time because of the success of the cars globally but Oxford will always be the home of Mini.”
This is not the first time Mini have chosen to base production outside of the UK, as both the Countryman and Paceman models are assembled at the Magna Steyr production site in Austria.
And, while the cars have traditionally been produced in the UK, it is only the brand’s second largest market, with 51,000 vehicles sold in this country last year. Surprisingly, it is the muscle car loving United States which tops the list of Mini-loving countries, racking up a total of 66,000 sales in 2012.
Perhaps this move to Holland is parent company BMW’s way of encouraging European buyers to show an interest in the small car, as Germany managed to sell 23,000 vehicles in the past year. Although the Eurozone crisis is having a heavy impact on the car retail market, small cars such as the Mini and the Fiat 500 are expected to prove popular in the coming months thanks to the smaller engine sizes and superior fuel economy offered by both brands.
Either way, it seems that Britain must wave goodbye to some, if not all, of the Mini brand. Yet with international investments from companies such as Jaguar Land Rover and Vauxhall flooding in, the question must be whether we really need to hold onto traditional British brands any more.
Do you think British makes of cars should have their production based in the UK wherever possible, or are investments from developing economies such as India and China the future for the car manufacturing industry in this country? Is Mini’s move to the continent a good idea, or will the impact of the Eurozone crisis leave BMW bosses regretting jumping ship?
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