Confusion surrounds the situation of a Chinese car making joint venture's second plant with Brilliance saying building has started and  BMW saying no decision has yet been made.

As just-auto reported at the time, the official Chinese news agency Xinhua late last November said BMW-Brilliance Auto had begun construction of a second plant in China's north east province of Liaoning.

The report said the additional 45,000-unit plant would expand production of BMW-Brilliance, a joint venture between the German group and Brilliance China Automotive Holdings, to 80,000 units upon completion.

This week, a senior Brilliance Auto official told Reuters at the Shanghai show the company was building their second plant as demand for luxury sedans remained solid despite a steep downturn in mature markets.

The joint venture plans to increase annual capacity by 75,000 to 80,000 units by the second half of next year, up from its capacity of 30,000 at end-2008, Yufei Wan was quoted as saying.

BMW issued a statement, however, saying no decision had been made on a second plant.

Reuters said Wan did not specify what BMW models would be made at the plant and acknowledged some details were not yet finalised.

"The specific amount of the investment has yet to be approved by the board, but a plant like this would cost CNY1.5bn to CNY2.0b (US$220-293m)," he said.

BMW currently manufactures 3 and 5 series sedans at the existing plant in Shenyang city and sold 16,580 cars in China in the first quarter, up 13.8% from a year earlier, Reuters said, citing automakers' data.

The JV also makes a unique long wheelbase 5 model with extra rear legroom and features because many executive cars sold in China are chauffeur-driven.

Wan told Reuters that Brilliance, which makes sedans, vans and light trucks, aims to be producing 500,000 to 800,000 vehicles per year in three to five years, an apparent step back from an annual sales target of 1m units in 2012, presented by Brilliance chairman Qi Yumin in April 2008.

The company sold 285,242 vehicles in 2008, ranking eighth among Chinese automakers, data from the country's official auto association showed.

Brilliance now sells cars in over 60 countries, mostly emerging markets, but has run into difficulties in Europe where some models rated poorly in crash tests, slowing sales.

Wan told Reuters the firm aims to generate about 20% of its vehicle sales from exports in the next three to five years, up from 7.7% in 2008. Most of those sales will be coming from developing markets, he added.

It is also developing batteries for clean-energy automobiles jointly with Johnson Controls.