BMW is to invest £100 million to upgrade the Cowley motor works outside Oxford where the Mini is made, it was announced today.

The decision, based on the new Mini's sales success, will create around 200 jobs.

The investment will fund a new body shell production building and modernisation of the paintshop at the plant.

The plant's managing director, Dr Anton Heiss, said: "It’s not just the high quality of vehicles produced here, but also the customer focus and production flexibility that have played such a major role in the car’s success.

A total of 4,500 people work at Plant Oxford and last year 189,492 cars were made at the plant, the only factory in the world which manufactures Minis.

The iconic Mini, first designed by Sir Alex Issigonis in the 1950s, became synonymous with the Swinging Sixties. The Rover car company in its various guises kept the Mini in production until the end of 2000 and sold more than 5.5 million. The Mini was voted the European "Car of the Century" by an international panel.

When German giant BMW took over production in 2001, moving the Mini operation to Cowley, it produced the new Mini in a 1.6-litre version.

Since being overhauled and re-launched, it now sells in 73 countries, and far outstrips BMW's initial production estimate of 100,000 per year.

In 2004, a total of 40,000 Minis were sold in Britain and 36,000 in the United States. The next biggest Mini markets are Germany, Japan and Italy, and the car is also proving popular in China.

In a separate announcement today, BMW also signalled that it is looking to expand into India in order to meet an Asian sales target of 150,000 cars within three years.

The Munich-based firm, battling DaimlerChrysler’s Mercedes-Benz to be the world’s top maker of premium cars, forecast group sales in Asia to grow by 10 to 15 percent this year.

BMW, whose stable also includes Rolls-Royce, said it sold 95,500 cars in Asia last year, around 8 per cent of its total sales.

BMW chief executive Helmut Panke, on a two-day trip to Singapore, said a BMW team of experts was in India to scout for possible locations for car production. BMW sold only 122 imported cars in India last year from outlets in Bangalore, New Dehli and Bombay.

"There’s no decision yet and we have no specific time frame. Perhaps we’ll enter a joint venture similar to the one in China," Herr Panke said.

He insisted that China, BMW’s second-biggest market in Asia by sales after Japan, would see above average long-term growth and dismissed last year’s 15 per cent drop in mainland group sales as a one-off.

Last month, BMW cut prices for the 3-Series and 5-Series cars it makes locally in a joint venture with Brilliance China Automotive by up to 15 per cent to lure buyers.

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