BMW is expanding capacity worldwide and looking for a new location in China as well as ways to boost Mini output.
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The company’s head of production, Frank-Peter Arndt, told Automobilwoche that BMW is in talks with its Chinese joint venture partner, Brilliance Automotive, about various options for increasing capacity.
“One option would be for Brilliance to make more capacity available to use at their Shenyang plant,” said Arndt. Currently BMW has capacity for 41,000 units at the plant.
Another option under considerarion is for BMW to build its own new plant. “As our joint venture partner is also operating independently in the market, and has its own interests, we are obliged to consider building a new plant,” added Arndt.
BMW sold 45,000 cars in China in 2006. Plans to increase capacity there are part of a long-term growth strategy that BMW CEO Norbert Reithofer is expected to present in October.
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By GlobalDataNews agency dpa-AFX quoted Reithofer saying: “The core theme is how to sustain profitable growth.”
Reithofer is expected to talk about building partnerships to keep investment costs down. He said it makes sense to reconsider such a core strategy every five to six years – the last time was in 2000/2001.
“During this process we turn every stone in the company.”
BMW is also considering increasing Mini capacity in the UK – it builds the cars in the so-called ‘Mini Triangle’ consisting of the Hams Hall engine plant nar Birmingham, the Swindon body pressings facility and Oxford final assembly.
Production this year is set to reach 220,000 which means that, from 2008, the company will start to hit capacity constraints, said Arndt.
Capacity at Oxford theoretically could be expanded to around 300,000 units, but alternatives are under consideration, such as having the car assembled by a third party – one possibility, alluded to by dpa-AFX, might be Magna Steyr which currently builds the X3 for BMW in Graz, Austria, but will lose this contract when the next generation models moves to the German automaker’s US plant.
Magna has also lost Chrysler’s contracts to build the redesigned Voyager/Grand Voyager minivans for markets outside North America and will not built the next-generation 300C sedan either.
Chrysler is taking both assembly jobs back in-house to plants in North America so Magna Steyr, whose parent firm Magna International recently sold a 20% stake to Russian Machines, should be keen to secure the Mini work, if it is offered.
Capacity might also be available at Bertone and Pininfarina, which specialise in contract assembly of niche models such as convertibles, and have both lost contracts recently to automakers’ own plants.
