BMW to Hike Capacity in China

BMW AG and partner Brilliance China Automotive Holdings Ltd. will invest €500 million in unspecified projects to expand capacity at their joint venture in Shenyang, China, according to BMW CEO Norbert Reithofer.

Reithofer spoke to reporters at the opening of the venture's second assembly plant, which also is in Shenyang. Each facility has annual capacity to make 100,000 vehicles. The partners aim to double output by 2014 at the new factory, which builds the X1 compact crossover vehicles. Their first plant makes 3 Series and 5 Series sedans.

Reithofer says the venture could produce as many as 400,000 vehicles per year in the medium term if it operated its plants around the clock seven days per week.

BMW CFO Friedrich Eichiner adds that the partners plan to expand engine production but offered no details. The venture currently has capacity to make 200,000 engines.

BMW reiterates that it expects its sales in China, which jumped 37% to 82,000 units in 2011, to grow 25%-30% this year despite the slowdown in the overall auto market. Reithofer opines that BMW's annual sales in China could eventually reach 500,000 vehicles.