BMW New Facility in China to Multiply Local Production by Four Fold
BMW started its production of the X1 compact SUV as of today. This production is taking place in China at its new facility. The new plant is captured in part of a 1.5 billion-euro ($1.9 billion) major expansion by BMW. BMW has plans to quadruple production China. In conjunction with its existing plant in Da Dong, (known as the Tiexi facility) it has been determined that its new capacity will support as many as 400,000 cars a year. Current capacity is at 100,000 units. This activity will help keep BMW ahead of Audi and Mercedes in the global luxury market. BMW has deemed a strong interest in its China footprint and thus proving so in its investment. Brilliance Automotive Ltd is BMW's Chinese joint venture company. It possesses two manufacturing plants in Shenyang: Tiexi and Dadong plants. The Brilliance partnership manufactures the X1, 5 series and 3 series vehicles. BMW Brilliance (Shenyang, China) is a 50-50 joint venture between Brilliance China Automotive Holdings Limited and BMW. The Ministry of Environmental Protection has confirmed BMW Brilliance's intentions to raise the Tiexi facilities capacity. Shenyang's environment is still a key concern and the ministry will need to determine its effects. For the first four months of 2012 the German Automaker has sold 107,211 locally built and imported vehicles in China. This is up a staggering 35 percent when compared to the previous year. BMW believes the China market could rise as much as 30 percent this year. It is important that balance is maintained for its global production in the US, China and Germany. CEO Norbert Reithofer confirmed this information to the media at the facility opening. The China Market accounts for approximately 25 percent of profit concerning the German "Premium Luxury Automakers". China's importance is key since relying on Italy or France is a little more risky. Both India and Russia could eventually become more prominent but China is clearly the number one and will be for at least a decade. BMW is planning on producing and selling two million cars and SUVs by 2016. For all of last year the BMW Group as a whole sold 1.67 million vehicles on a worldwide basis.