Citing a report in the Financial Times Deutschland, Reuters on Friday reported that BMW may start building more cars in the United States, a move that would reduce the firm’s exposure to currency fluctuations.

Reuters noted that BMW currently produces around 150,000 Z4 roadster and X5 sports utility vehicles each year at its plant in Spartanburg, South Carolina, where it has invested almost $US2 billion since breaking ground at the facility over a decade ago.

“I can imagine us also producing other models at Spartanburg in the long term,” Michael Ganal, board member responsible for sales and marketing, reportedly told the Financial Times Deutschland.

According to Reuters, BMW said in May the United States had become its largest market for the first time, but unlike some other car makers, it has not seen profits hit by the recent strength of the euro because it is fully hedged for this year and two thirds hedged for 2004.

Reuters said that analysts worry that in the longer term the company could suffer from a strong euro, which makes cars produced in Europe more expensive in the US, if it does not increase production in the dollar area.

The news agency said BMW has planning permission to double its capacity at Spartanburg, which currently accounts for around 13% of its global output, as it strives to increase its annual sales by around 40% to 1.4 million vehicles by 2008.

According to Reuters, Norbert Reithofer, the BMW board member responsible for production, said a year ago that the company could produce its forthcoming X3, a smaller version of the X5 which has been one of its main growth drivers in the US, at Spartanburg.

BMW recently released first details of the X3 and said production of 60,000 a year had been contracted to Magna in Austria.