BMW set to boost U.S. production, expand in Thailand

GOTHENBURG, Sweden, June 24 Reuters reports that German luxury carmaker BMW AG said on Monday it planned to continue to raise production at its U.S. Spartanburg plant in the long term to keep up with demand in the world's biggest car market.

"If I look into the year 2003, production volumes in Spartanburg could be 150,000 units ... That means we have constant growth in the U.S. from a production point of view," Norbert Reithofer, BMW board member for global production, told reporters on the sidelines of an auto conference.

Production at the South Carolina plant, which makes BMW's Z3 roadster and the highly successful X5 sports utility vehicle -- one of the main drivers of BMW's growth in the important U.S. market -- had doubled by 2001 to 120,000 units per year from 1997's level, Reithofer said.

Asked when BMW could expect to double its production at Spartanburg again, Reithofer said this would depend on product cycles and would be possible only after 2005.

He said this was a long-term strategic target, if an ambitious one, and added that it would be possible in the future for the plant to produce the X3, a smaller version of the X5.

BMW, one of the few automakers able to raise capacity as many others cut back, also said recently it planned to raise production of its new Mini cars by about 15-20 percent from its original target of 100,000 this year.

It produces the Mini in Oxford in the UK where it has already introduced a weekend shift to its two shifts. BMW is also building a new plant in Leipzig, in eastern Germany, where it will produce the 3-Series, allowing it to make its new small 1-Series in Regensburg.

BMW, which has become a darling among investors since disposing of its loss-making Rover unit in 2000, has reoriented itself to focus on the luxury market, which it says has far greater growth potential than the volume car market.

THAILAND EXPANSION?

Reithofer also said BMW may in the future boost its operations at its plant in Thailand which currently produces around 2,000 vehicles per year.

"A next step could be introducing a further model for our plant in Thailand and moving up to 10,000 units," he said, adding that plans depended on whether countries including Thailand and Indonesia would set up a customs union.

"Then it would make sense to have a hub in Asia, for example in Thailand, and to supply, for example a 3-Series, from there. But that is a future scenario."

Reithofer also said that demand for the new high-margin 7-Series limousine continued to be strong and the Munich-based company had detected no dip in new orders following a recall in May to correct possible software-related problems.