BMW plans to build a new engine plant in mainland China, as it vies to close the gap with Audi – which for decades has dominated the country’s luxury car market.
The automaker told Bloomberg News it plans to complete construction of the new facility by 2016 with local partner Brilliance China Automotive Holdings.
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The plant will be located alongside BMW’s existing vehicle assembly plant in Shenyang and will have an initial production capacity of 200,000 units per year. The plant’s capacity is expected to rise to 300,000 units per year in the medium term and up to 400,000 units in the long term.
Increasing local engine production will help BMW reduce costs in China through lower shipping costs, lower import duty and ultimately by sourcing more components locally.
BMW sold around 391,000 vehicles in China last year while Audi’s sales were close to 492,000 units.
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