Brilliance BMW to build second plant later this year

Shanghai, May 15 (Gasgoo.com) BMW and its Chinese partner Brilliance have decided to build the second plant of their joint venture (JV) later this year. The new facility, with an annual capacity of 100,000 units, will produce the newly launched BMW 1 series as well as the BMW 2 and 3 series currently made in the JV. The new plant located in Dadong district of northeast China's Shenyang city is expected to start operation at the end of 2009.

The construction of Brilliance BMW's second plant means that more BMW cars will be locally made for the Chinese market and more BMW auto-making technologies will be introduced into China. Earlier last year, The German carmaker worried that the expansion of the JV's capacity might exceed the market demands for its products, but Brilliance insisted that their sales would grow and a new plant should be built. And last month BMW finally agreed to this expansion project because more than 50,000 BMW vehicles were sold in China in 2007, up 40% year on year (y/y), and BMW's China sales grew further in the first quarter this year.

BMW expects to achieve double-digit sales growth in China in 2008 for both its BMW and Mini vehicles. The German automaker also plans to raise the annual capacity at the current plant in Shenyang by about 45% to about 41,000 units as it looks to 'become the most successful premium car company in China,' said Ian Robertson, member of BMW's board of management for sales and marketing, at the recent Beijing Auto Show. The second plant will greatly expand the JV's capacity to over 140,000 units in 2010.

The German automaker produces BMW 3 and 5 series cars at the Shenyang plant with its local partner Brilliance China. The first quarter sales of BMW vehicles in China rose by 40% from a year earlier to almost 14,000 units while Mini sales increased 112% to about 700 units.

BMW also announced the launch of its BMW 1 series in China last month. The automaker will sell the 120i and 130i versions of the compact car in China. The second plant of Brilliance BMW will locally produce the BMW 1 series as well for the growing Chinese market.