BMW to invest £500m in UK factories

The money will help fund the production of the next generation Mini in the UK, safeguarding more than 5,000 jobs.

BMW's investment plan is the second major boost to the UK's motor manufacturing industry this week.

Its announcement came the day after Nissan said it would invest £192m and safeguard 6,000 jobs by building its next generation Qashqai here.

BMW's main facilities are its vehicle assembly plant in Oxford, the pressings plant in Swindon and the company's engine plant at Hams Hall near Birmingham.

The motor industry produces the country's most valuable manufactured exports, with £27bn worth of vehicles and parts going overseas in 2010.

BMW, which has already invested £1bn in the UK since 2000, exports BMW engines as well as Rolls-Royce and Mini cars to the tune of £2.4bn a year and thus accounts for about 1% of all goods exported by UK companies.

The UK automotive sector employs 300,000 people in manufacturing.

Later on Thursday the prime minister will host a meeting with the board of directors of the European Automobile Manufacturer's Association (ACEA) to discuss the growing confidence in the UK automotive industry.

"Confidence"

The ACEA, whose members include motor industry giants including Daimler, Fiat, Ford and Toyota, is in London for its annual conference.

It is the first time the association meets in the UK, something Business Secretary Vince Cable said showed growing international recognition of the UK's car making industry.

Prime Minister David Cameron said BMW's investment was an important element in strengthening the country's economy.

"The production and export of iconic British cars like the Mini is making a real contribution to the rebalancing of the economy that this government is determined to achieve," he said.

"It's a tremendous vote of confidence in the skills and capabilities of the company's British workforce and in the future of UK manufacturing."

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