BMW second plant program settled

It is reported that BMW Group has made an agreement with the Shenyang municipal government early this June to open its second plant at Dadong District in Shenyang, and relevant negotiations are still underway.

The Shenyang municipal government has set a business target to produce 1 million complete vehicles by 2010 with a production value of 100 billion yuan, which will be contributed by three major auto enterprises at the Dadong district, including Brilliance Automotive Corp, Shanghai GM Beisheng Auto Co, and BMW Brilliance.

BMW Group's launch of expansion scheme in China is undoubtedly a heavy blow to European and US auto makers, especially to high-end luxury auto makers, like Audi. Currently over 100,000 units FAW-VW Audi brand vehicles are being sold annually in China.

BMW's existing Shenyang plant, built three years ago, has already reached the full capacity of 30,000 units annually, thus BMW Group decides to expand its investment in China to build another plant in the region. The Group sold 10,100 units BMW models in the Chinese market in the first quarter, up 34.2% y-o-y, and this percentage is 90.7% at the same period last year.

Besides the expansion of production capacity, BMW will also accelerate localization of auto parts. It will increase the value of auto parts it purchases in China from 2 billion yuan last year to 3 billion yuan this year and increase the local supplier from over 50 to more than 80 this year, said Wu Peide, CEO of BMW Brilliance Automotive Ltd.

At present Draexlmaier Group has made an investment of 4.5 miliion euros to open an auto parts plant in Shenyang which, together with Delphi, Leon's plants planned, a Wuerth fastener plant already expanded, will help to promote BMW's localization plan in China.