BMW Cautious on Expanding Output in China

BMW AG plans to increase its production in China by year-end to an annual rate of 200,000 vehicles. But the company is taking a wait-and-see approach on its next phase of growth, which would add 100,000 units of capacity over the next several years, The Wall Street Journal reports.

Sales and marketing chief Ian Robertson tells the newspaper that BMW will monitor the growth pace of China's luxury-car market before deciding whether to make the capacity increase it announced last May. The company's sales in China rose 37% to 82,000 vehicles last year despite a 3% decline in industrywide volume.

BMW has been building 3 Series and 5 Series vehicles in Shenyang province with joint venture partner Brilliance China Automotive Holdings Co. since 2003.

In late 2009, the partners announced they would open a second Shenyang factory with annual capacity to make 25,000 vehicles. Last May the companies said they planned to nearly double that capacity. The plant will produce the BMW X1 compact crossover vehicle.