BMW enters U.S. police-car market with engine deal

Bayerische Motoren Werke AG, the world's largest maker of luxury vehicles, won a contract to supply engines for U.S. police cars that could be worth more than 1 billion euros ($1.35 billion).

BMW will supply more than 240,000 six-cylinder diesel engines, cooling systems, exhausts and automatic transmissions to Carbon Motors Corp. of Indiana, the Munich-based company said in a statement. The order value will be measured in "billions" of euros, spokesman Mathias Schmidt said in an interview.

The contract is the largest since BMW announced plans to step up engine sales to other companies in 2007. The owner of the Mini and Rolls-Royce brands currently supplies engines for boats and exotic car manufacturer Wiesmann GmbH in Duelmen, Germany, and is seeking to boost revenue after profit fell to a 10-year low in 2009 because of a loss at the auto division.

Today's agreement with Connersville-based Carbon Motors "marks an important milestone" in BMW's powertrain strategy and more deals will follow, Ian Robertson, the German carmaker's head of sales, said in the statement.

The BMW-built engines may cost more than 3,000 euros each, said Christian Mueller, an analyst with research firm IHS Global Insight. Other components will come from suppliers, with the European company integrating them for Carbon Motors, he said.