A DECISION on whether the new electric Mini will be built in Oxford or overseas will be made before the end of this year.

Fresh concerns have been raised that the city’s Cowley plant could lose out on the future investment as Britain leaves the European Union.

It comes as car manufacturing giant BMW said it was considering building its new electric car in Germany rather than the ‘home of Mini’ in Oxford if the UK left the single market, according to German newspaper Handelsblatt.

Sources said it ‘wouldn’t make sense’ to invest in the Mini plant in Oxford if a hard Brexit deal was done.

Oxford East MP Andrew Smith said the announcement underlined how important a ‘sensible agreement’ needed to be made to ‘secure the future of the Mini plant’.

Mr Smith said: “A tariff-free market is crucial, as is freedom of movement for key workers, continued adherence to EU product and component standards and emission regulations, as well as recognition of intellectual property rights. 

“I am very concerned that the UK government and their EU counterparts reach agreement on all these points in the negotiations.  

“I know BMW will be making its position on this clear to the German as well as the UK government. BMW has made a massive investment in Cowley, and there are very powerful arguments for them to continue to invest in Cowley as the home of the Mini.”

Oxford City Council leader Bob Price said the decision was ‘complex’ because the negotiations of Brexit had not started yet.

He added: “I suspect at this stage they are still thinking about it [where to build the car]. It’s not set in stone. 

“I think they recognise the plant is very successful.”

Two plants in Leipzig and Regensburg, Germany, are reportedly being considered as alternatives to Oxford.

The electric Mini is planned to debut in 2019.

A BMW Group spokesman said since it revealed the development of an electric car it had ‘made no further announcements about the model itself or the production arrangements’.

He added: "The decision about where to build this car will be taken before the end of 2017"

Tony Burke of Unite said the union were seeking ‘immediate assurances’ from BMW.

Oxfordshire Liberal Democrat MEP, Catherine Bearder, said: "This is the latest in a long line of major blows to the UK car industry.

“This government is supposedly committed to ensuring electric and battery-operated vehicles are at the heart of its industrial strategy – yet Theresa May’s hard Brexit undermines this time and again.

“It is time for Mrs May to listen to businesses large and small about their concerns over our membership of the Single Market.

“No longer the party of business, the Tories are increasingly becoming the party of narrow nationalism.”