The Munich-based carmaker BMW said yesterday that it would expand its British-built Mini range within the next three years, introducing a new, more functional model with a larger interior.

The company is already expanding its plant at Oxford to raise Mini production to about 240,000 a year compared with the 200,000 produced last year. BMW has already demonstrated a new Mini concept car, which is based on the old Morris Mini traveller that started life in the 1960s, but has kept further details under wraps. However, it is understood that as well as the traveller look - with a split double rear door - it may also produce a hatchback version. Petrol engines for the new model will be made at the Hams Hall plant near Birmingham.

BMW enjoyed its best quarter ever during the first three months of the year and was on track to make a pre-tax profit of €4bn (£2.75bn), its chairman, Helmut Panke, said yesterday. In the first three months, sales of BMW, Mini and Rolls-Royce cars totalled 332,923 vehicles, up almost 14% on the same period last year. That was despite a 6% fall in Mini sales because of a three-week production shutdown at Oxford over the Christmas and new year period as part of the £100m programme to boost output.

This year BMW is planning to launch a successor to the 3 series coupe, as well as coupe versions of its Z4.

Group pre-tax profits rose 12% to €921m before an extraordinary gain of €375m on the partial settlement of exchangeable bonds linked to the company's holding in the aero-engine manufacturer Rolls-Royce, the legacy of a joint venture which was dissolved in 1999.

BMW said its performance was still being affected by currency movements and high raw material costs but added that it planned to offset the impact with increased efficiency and productivity. "In terms of operating results, the current year, excluding the one-off gain, will therefore be the best year in the company's history to date," Mr Panke said.