Rolls-Royce cars could be built at a new £500m plant in Cowley.

Rover's parent company BMW is considering Oxford as a potential site for a new Rolls-Royce factory when it takes control of the luxury brand in 2003.

Officially, the German company will only say it is studying several sites in England and expects to decide within six months.

But Hendrich Heitmann, BMW's sales and marketing director, has already rejected rumours in the industry that it was planning a site close to Heathrow airport. The Cowley plant has a long association with Rolls-Royce. For 50 years it manufactured body assemblies for the luxury car-maker. That deal only ended two years ago when millions of pounds were invested in a new body plant at Crewe.

Another strong link is Rolls-Royce's manufacturing director Doug Dickson who, as managing director at Cowley, was in charge of its transformation in the run-up to the launch of the Rover 75.

The re-branded Rover Oxford site also has plenty of surplus land for new production lines, and BMW sources said their final choice could just as easily be a "brown field" site as a completely new factory. The most likely scenario is that parts of the new Rolls-Royce cars - such as the bodywork - will be made at existing plants but assembled at a new plant.

Industry sources say it will take BMW about two years to build and equip a new factory and train staff.

BMW takes control of the Rolls-Royce marque from rival Volkswagen in 2003. VW bought Rolls-Royce from Vickers for £470m last year, but under an agreement with BMW will only retain the Bentley brand in the long-term.

Story date: Thursday 21 October

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