NEW YORK BMW AG executives announced plans March 28 to invest $1 billion between 2014 and 2016 in the luxury automakers Spartanburg, S.C., plant.
"This will allow Spartanburg to increase its capacity to 450,000 cars per year," Norbert Reithofer, chairman of Munich, Germany-based BMW, told an audience at the plant, about 80 miles west of Charlotte, N.C.
"This means 50 percent more than today, and these 150,000 additional cars is equal to a whole new plant," Reithofer told the audience, which included U.S. Commerce Secretary Penny Pritzker and South Carolina Gov. Nikki Haley. "More importantly, Spartanburg will become the largest plant in our global production network, marking a new milestone in the history of the BMW Group."
For domestic steelmakers, the expansion also means an incremental strengthening in the market for high-end automotive steels, significant portions of which go into vehicles destined for export. On average, Spartanburg already exports 70 percent of its annual production, with a 2013 value of more than $7.5 billion, making the company the largest U.S. vehicle exporter to non-North American Free Trade Agreement countries, according to Commerce Department figures.
Strong global demand for the BMW X models was cited as a major factor behind BMWs decision to expand Spartanburgs production capacity. The German automaker currently produces the X3, X5, X5M, X6 and X6M at Spartanburg and has just begun production of the 4X there. In the near future, a plug-in hybrid version of the X5 also will be produced at the plant, the company said.
"And today, we are also announcing another, all-new, larger X model to be manufactured exclusively at this plant for our world market: the X7," Reithofer said. "The U.S. plant is the best example of our successful strategy of "production follows the market," he added, referring to the United States as BMWs "second home."
BMWs latest outlay marks the fifth expansion in Spartanburg and will bring its total investment there to almost $7 billion. Since production began at the site 20 years ago, the plant has produced more than 2.6 million vehicles for customers around the world.
Last year, 297,326 vehicles were manufactured in Spartanburg with 1,100 vehicles currently produced per working day.