Mini sales will fall this year as BMW's Oxford plant continues to undergo a £100 million facelift.
BMW sales rose by nearly 15 per cent to 93,811 units in January, chief executive Helmut Panke said at the Geneva Motor Show yesterday.
The Munich-based carmaker, which owns Rolls-Royce and builds four-cylinder petrol engines at Hams Hall near Birmingham, still expects a new sales record in 2006 thanks to the popularity of Mini and the new 3 Series.
But Mini unit sales are expected to fall when production at Oxford stops temporarily mid-year.
The Cowley site, formerly owned by Rover Group, is getting a second bodyshell production building and upgraded paint shop ahead of the new Mini next year.
The investment will raise production volumes to more than 200,000 a year - double the projected level when Mini was launched in late 2001 - and create 200 jobs.
UK and western European sales fell by about half in January because construction work meant the factory was shut for longer than usual over Christmas.
Mr Panke yesterday cautioned against using the current growth rate in BMW group sales as a basis on which to forecast the trend for the whole of 2006. "It is certainly not possible to sustain this high growth rate," he said, adding that the huge increase seen at the start of the year is particularly due to seasonal trends.
Meanwhile in Geneva yesterday, prospects for a wave of large scale mergers between carmakers were being played down. In contrast with sectors such as steel and energy, the automotive industry is currently quiet on the mergers and acquisitions front.
Jean-Martin Folz, chief executive of French group PSA Peugeot Citroen, knows the reason why.
"We always said that big mergers were not the way forward and it seems that the other car groups now share our opinion," he said.
Speculation over a takeover of Fiat and talk of Renault buying up Jaguar or Saab has died. Only Daimler Chrysler's Smart unit is openly available for match-makers.
Yet the lack of major M&A moves does not mean car makers are not talking to each other.
Companies are entering into product and development alliances with various partners.
BMW, for example, is developing the petrol engine (to be made at Hams Hall) for the new Mini with PSA Peugeot Citroen, which also has a joint venture going with Ford.
"The time of big mergers is over, for the moment, but we can see more strategic alliances of the Renault and Nissan kind," said Patrice Solaro, car sector analyst at Kepler
Equities. However, he added that before the end of the decade there could again be shake-ups.
"After the intense transaction fever and flurry of mergers and acquisitions of the late 1990s, we have reached a pause in the consolidation process," said Emmanuel Bulle, director in debt rating agency Fitch's European industrials team.
"Full scale acquisitions or mega-mergers have been increasingly replaced by selective alliances and part-nerships, which are very beneficial to car manufacturers," he added.
Peter Schmidt, editor of Automotive Industry Data, also believes that big alliance deals or mergers had become very unlikely.
"There has been a clear change of attitude in the car sector.
"While not that long ago people wanted to create a world company, an empire, so many of these plans have gone sour that the mood has changed.
"Look at DaimlerChrysler, the so-called marriage made in heaven, that has not lived up to the billing," Mr Schmidt said.
Toyota was now the world's most successful car company partly because it has always done things on its own.
"The lesson today is to stay away from big overall mergers and maintain flexibility with contractual deals," he added.