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BMW talks up UK commitment but quietly expands Dutch site

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BMW talks up UK commitment but quietly expands Dutch site

BMW talks up UK commitment but quietly expands Dutch site
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By Sarah Young and Edward Taylor

LONDON/FRANKFURT (Reuters) - BMW <BMWG.DE> said it is not considering moving production out of Britain because of Brexit, although the carmaker has cut its dependence on its Oxford car plant by quietly expanding a new Dutch assembly site for its Mini brand.

By building up a second export base for its Mini brand outside of Britain, BMW can mitigate any damage caused by a possible hard exit from the European Union's single market.

Asked whether the German carmaker was actively considering moving production out of Britain due to uncertainty over future trade relationships, BMW executive Ian Robertson said: "No we're not."

"We are committed to our operations in the UK, our workforce here," the German carmaker's special representative for Britain said at a conference on Tuesday.

Comments published in the Financial Times from another BMW executive on Monday suggested that BMW would close its British factories which make Mini and Rolls-Royce cars if Brexit leads to serious supply chain disruption.

Robertson said those comments were taken out of context and referred to supply chain disruption resulting in delays to production at factories.

Asked about the impact of Brexit uncertainty on any new production in Britain, Robertson said there were no investment choices to be made on that front.

"In our cycle we are in an enviable place because we took a lot of decisions three and a half years ago and as a result we don't need to make any decisions right now," he said on the sidelines of a conference in London.

Britain's main car lobby group said on Tuesday that a lack of clarity on Brexit had halved new investment in the industry and urged Prime Minister Theresa May to keep the world's fifth largest economy in the EU's customs union.

BMW has spent the past four years quietly stepping up production capacity at a new European export hub for the Mini with Dutch contract manufacturer VDL Nedcar, reducing its dependence on a plant in Oxford, central England.

At VDL Nedcar staffing levels have jumped to about 7,200 today, from around 4,500 last year and 1,450 in 2014, VDL said. VDL declined to give a current figure for vehicle production, but said capacity has risen beyond 170,000 vehicles last year, from 89,000 vehicles in 2016.

"The numbers at VDL Nedcar have nothing to do with the current Brexit discussions," BMW said.

By contrast staffing levels at BMW's British plant have remained relatively stable during the same period, with just over 4,500 people working on building Minis in Oxford.

The plant in Oxford made about 60 percent of the 378,486 Mini's produced last year.

BMW said VDL's staffing levels have jumped after it added the assembly of BMW's popular X1 model to the Dutch production line in August last year, in addition to building the Mini hatch, Mini plug-in hybrid and Mini convertible at the plant in the southern Dutch town of Born.

(Reporting by Sarah Young and Edward Taylor; Editing by Kate Holton/Keith Weir)

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