German luxury car manufacturer BMW said on Tuesday it will build a future all-electric version of its Mini in Britain, easing fears that it might move production away after Brexit.
Electric drivetrains will be built at two plants in Bavaria "before being integrated into the car at Plant Oxford, which is the main production location for the Mini 3 door model," the group said in a statement.
BMW chief executive Harald Krueger had issued what sounded like a veiled warning at the Munich-based firm's annual general meeting in May.
Brussels and London should show "pragmatism" in Brexit talks to avoid pitfalls that could harm industry, he said.
BMW had other production facilities on the continent that could take on Mini production, he added.
UK welcomes decision
Britain's business minister Greg Clark welcomed the decision, saying it was a "vote of confidence" in government efforts to make Britain a go-to place for the next generation of vehicles.
The car industry encapsulates many of the challenges the UK must address as it seeks to disentangle itself from 40 years of EU membership and strike a new trade deal before the March 2019 cutoff date.
As well as the potential for high tariffs on finished cars crossing a future UK-EU border, leaving the EU could also disrupt supply chains that see components crossing borders many times for different production processes before being built into vehicles.
Investment in Britain's automobile sector fell in 2016 to less than $2.2 billion (£1.7 billion , 1.9 billion euros) from 2.5 billion in previous years.