BMW moves engine production to Britain as German plants go electric

BMW on Wednesday said it will retool its German factories to build electric cars and components and shift manufacturing of combustion engines to plants in Austria and England as part of a broader shift toward low-emission cars.

Factories across the globe are clamouring for investment into next-generation cars as electric vehicles gain traction with consumers and as governments hasten the demise of the combustion engine.

Germany on Wednesday unveiled a 3-billion-euro ($3.56 billion) scheme to promote low-emission cars and Britain said it will ban the sale of new petrol and diesel cars and vans from 2030.

"By the end of 2022 all our German factories will make at least one fully electric car," Milan Nedeljkovic, BMW's board member responsible for production said in a statement on Wednesday.

BMW's Munich plant, which currently makes four, six, eight and twelve cylinder combustion engines, will be retooled with a 400 million euro investment until 2026, to make next-generation electric vehicles, the carmaker said.

BMW said production of eight and twelve cylinder engines will move from Munich to Hams Hall in England, and other engines will be made in Steyr, in Austria.

Bavaria, where BMW is based, will receive the lion's share of the investments, the carmaker said. The BMW i4 electric car will be built in Munich, a fully electric version of the 5-series and 7-series will be made in Dingolfing and an electric X1 will be made in Regensburg.

BMW's said the number of staff at its Dingolfing factory making electric car powertrains, will double, to 2,000 workers.

BMW's plant in Leipzig, Germany, will start manufacturing the Mini Countryman and the Regensburg and Leipzig plants are being prepared to make battery modules, the company said.

BMW will improve its cost structure by 500 million euros by the end of the year, the company also said.