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Article: BMW set to boost its output in the U.S.

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    Posted: 12-March-2008 at 15:44
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BMW set to boost its output in the U.S.

BY MIKE RAMSEY • BLOOMBERG NEWS • March 11, 2008

Bayerische Motoren Werke AG, the world's largest maker of luxury autos, will spend $750 million to expand its South Carolina plant, increasing U.S. capacity as the dollar weakens against the euro.

The expansion will add 500 jobs at the Spartanburg factory and boost capacity 50%, to 240,000 vehicles a year by 2012, the Munich-based company said in a statement Monday. Employment will increase 9.3% from the current 5,400 workers.

BMW can save money by boosting output in the United States, where sales of its namesake brand have gained 27% in the past five years. Producing vehicles in Europe for the United States has become less profitable as the euro has risen more than 10% against the dollar in each of the past two years.

"They want to start denominating more of their production outside of the euro," said Michael Robinet, an analyst at CSM Worldwide Inc. in Northville.

After the three-year expansion, the South Carolina plant will build the X3, X5 and X6 SUVs, as well as variants of those models sold outside the United States. The factory, which opened in 1994, now builds the X5, the X6 and the Z4 roadster. It produced 157,530 vehicles last year.

The expansion, which will add 1.5 million square feet, also will increase the number of vehicles exported to markets outside the United States, BMW said.

Other European automakers are considering further investment in North America. At the Los Angeles auto show in November, Volkswagen of America CEO Stefan Jacoby told the Free Press that VW would name a site for a U.S. plant in the first half of 2008. VW spokespeople later said that was not the company's position.

Spokespeople currently say that the automaker will decide in the next six months whether to build a plant in the United States or Mexico.

Free Press staff contributed to this report.


from here...


Edited by kbannon
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