BMW has announced that it will invest a further £250m ($388m) in its UK manufacturing facilities by the end of 2015, bringing total expenditure to £1.75 billion, and is looking to expand capacity for volume increase with the addition of a satellite contract manufacturing facility. The carmaker’s preferred option is Mitsubishi’s Netherland’s Car (Nedcar) plant near Born according to BMW board member Harald Krüger, a decision based on the proximity of the plant to the UK operations ensuring an efficient supply network.

At a visit to the Oxford assembly plant in the UK that was also attended by the British business secretary, Vince Cable, Krüger told those gathered that Mini will be increasing volumes and introducing ten different models in the mid-term. This demands investment in the Oxford facility, as well as the body pressing plant in Swindon and the engine plant at Hams Hall, near Birmingham.

The extra volume and the complexity of the new model lines means that additional production capacity and input will be needed in the medium term as the Oxford plant reaches its maximum capacity.

The increase is expected to lead to greater demand on both inbound and outbound logistics services, both within the UK and between it and the Netherlands, though BMW said it was too early to comment on this aspect of the new business.

“Our preferred option is to establish a contract manufacturer as a satellite production as close to our UK operations as possible, at the Nedcar plant in The Netherlands, with whom BMW is in discussions,” said Krüger.

While it did not confirm that its long-term contract manufacturing partner, Magna Steyr, would be chosen for the proposed site, Krüger did state that BMW would continue to develop its cooperation with the company, a development that “would create the opportunity for extra volume for [its] engine plant in Hams Hall and [its] pressings operations in Swindon, as well as for UK-based MINI suppliers.”

Magna Steyr already makes the MINI Countryman in Austria but the company also declined to confirm whether it was in the running to handle the proposed contract manufacturing at the Netherlands plant.

Mitsubishi will end Colt and Outlander vehicle assembly at Nedcar production facility at the end of the year and said in February that it has no plans to introduce a new model to the plant in 2013. The company has maintained that the status of the facility beyond then was yet to be decided (read more here).