BMW to build hybrid car engine in UK

Hams Hall near Birmingham, the German carmaker said on Tuesday.

The UK factory will be the sole supplier of the three-cylinder, high-tech petrol engines for the car, which BMW will assemble in Leipzig and begin selling in the second half of 2013.

The announcement is the latest of several by global carmakers – including General Motors, Nissan, and Jaguar Land Rover – who are expanding their operations in Britain despite the festering crisis in the eurozone weighing on the industry’s main export market.

BMW’s choice of the highly automated plant, which produced its three millionth engine last week, will entail no new investment or job creation.

The engine is part of a pledge made by the company last year to invest £500m over three years in the UK, including at its Mini plant near Oxford and at Rolls-Royce in Goodwood.

Ian Robertson, BMW’s head of sales, said that the premium carmaker chose the UK over its plants in Munich and in Steyr, Austria primarily for currency hedging reasons.

“We have a lot of sales in pounds and we manufacture a lot in pounds, which gives us a natural ability to balance these things out,” Mr Robertson said. “We see the UK market as a very strong one going forward in terms of sales.”

Separately, BMW said it would open the first showroom worldwide for its BMWi hybrid and electric car brand on Park Lane in London on Wednesday.

The sub-brand, devoted to “sustainability”, is targeting drivers in big, densely populated megacities – like London – where BMW thinks 70 per cent of the world’s population will live within the next 20 to 30 years. In addition to the i8 hybrid, the carmaker plans to make the i3, an all-electric model.

BMW made the announcement at the International Automotive Summit, organised by the Society of Motor Manufacturers and Traders lobby group, where several speakers sounded a positive note about the industry’s prospects despite the bearish mood in the broader economy and on world markets.

The SMMT said this week that UK-based carmakers could break the industry’s previous production record of 1.92m cars reached in 1972 by 2015, when output could surpass 2m for the first time.

Carmakers have cited the UK’s relatively flexible workforce, large domestic car market, and currency as reasons for expanding their investments in the UK.

Vince Cable, the business secretary, said that BMW’s decision to choose Hams Hall represented “more good news for the UK automotive sector and underlines its growing competitive strength”.

While BMW is one of Britain’s biggest carmakers, employing more than 7,000 people directly, it does the research and design work for its Mini and Rolls-Royce cars in Germany.

Mr Robertson said that this was unlikely to change.

“The core engineering – and particularly as we go forward with a multiplicity of products – that is likely to remain in Germany,” he said.

Texted sourced from:http://www.ft.com/cms/s/0/005fb210-b49b-11e1-bb2e-00144feabdc0.html#axzz1xbaeKm1V
Image sourced from: http://www.telegraph.co.uk/finance/newsbysector/industry/9326915/Cable-calls-for-strategic-vision-for-manufacturing.html