BMW almost doubling capacity at Chinese venture

Bayerische Motoren Werke AG (BMW), the world's largest maker of luxury cars, will almost double the capacity at its Chinese venture, according to the vice-governor of the province where plant is located.

The factory would be able to make 80,000 cars a year after the expansion was completed, Liu Guoqiang, vice-governor of Liaoning, told reporters at a BMW event in the province yesterday.

Work may begin as early as this year, he added.

Luxury carmakers including BMW and Volkswagen AG's Audi AG have added new models and raised production in the world's second largest motor vehicle market as China's surging economy boosts demand for premium sedans. Sales of cars with engines of between three and four litres jumped almost five-fold last year.

"China has much more room for development than the mature markets in North America and Europe," said Vivien Chan, an analyst at SinoPac Securities Asia Ltd in Hong Kong.

"BMW Brilliance is also less affected by rising fuel prices than makers of cheaper cars as its customers are better off," Chan added.

BMW Brilliance Automotive Ltd chief executive officer Alfred Rupp confirmed that expansion work was planned, without commenting on the final capacity for the factory. A second plant was also under discussion, he said.

The venture, part-owned by Hong Kong-listed Brilliance China Automotive Holdings Ltd, was expanding its annual capacity to 41,000 vehicles this year from 30,000 through plant upgrades and other measures, it said in March.

"BMW has contributed to the growth of Liaoning," Liu said.

Munich-based BMW's China sales rose 28% in the first half to 30,325. Sales jumped 42% for the whole of last year.