Let’s not get carried away by BMW hype

Step back from all the hyperbole, though, and Plant No 12 (official BMW-speak for Hams Hall) is not quite the bright point of UK light that the group would have us believe.

It would be easy to be carried away by the sense of achievement and optimism surrounding BMW’s new engine factory at Hams Hall, near Coleshill. Without doubt, it is a positive development for UK (Manufacturing) plc after the automotive sector’s spate of bad news — a good deal of which was attributable to BMW’s decision to sell its Land Rover, MG and Rover businesses.

Hams Hall represents the first of the German group’s three industrial commitments to the UK up to the end of 2002. It will begin production of the new generation Mini at the rebuilt Oxford factory this spring. Then, by the end of next year, planning permission permitting, it will have built a new car assembly unit near Goodwood ready for the formal takeover of Rolls-Royce Cars at the start of 2003.

With the Rover experience now consigned to history, BMW is doing phenomenally well again. Sales are soaring and the once-flagging share price has returned the smiles to investors’ faces.

The Valvetronic technology in the engines made at Hams Hall — and later in all other BMW petrol engines — is said to represent an automotive step change as great as that between carburettors and fuel injection. Nearly half the Hams Hall engines will be fitted to a new model smaller than the 3-series Compact, which debuts at the Geneva motor show in a few days time.

Step back from all the hyperbole, though, and Plant No 12 (official BMW-speak for Hams Hall) is not quite the bright point of UK light that the group would have us believe. For a start, it is here by accident, a reminder of the failed Rover strategy. Its original primary role was to make power units for new Rover models: BMW’s own small car project had to be resurrected after the group abandoned the model.

Despite the two plants being only a few kilometres apart, Hams Hall’s engines cannot fit into Oxford’s Minis. Those engines will be made in Brazil, while Hams Hall’s will be despatched to BMW plants in Germany, the US and South Africa.

And neither is the £400m investment all it would seem. It includes £41m worth of selective regional development aid, for which chief secretary to the Treasury Andrew Smith declares himself well satisfied. Well, he would, of course.

However, the engine was designed and developed in Germany and almost all its components are made in mainland Europe, particularly Germany. A mere 8% of Hams Hall’s suppliers are in the UK. And when those components reach the plant, the equipment which machines and assembles them is sourced from BMW’s regular suppliers in Germany.

The UK content, then, comprises the factory walls and the 1,500 people who will eventually work there. That does not seem much for £400m.

Richard Feast is editor-at-large for Automotive World

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