BMW AG will spend $300 million to expand production capacity at its assembly plant in Spartanburg, South Carolina, USA. The expansion could mean BMW intends to make additional sport-utility models at the plant.
BMW said last week it intends to build an unspecified number of additional X5s at the plant. Demand for the 'sport-activity vehicle' is growing, and according to the automaker's North American sales subsidiary, the demand is still greater than the current supply.
But BMW also has a larger plan for X5-like products.
BMW Chairman Joachim Milberg has indicated that the company wants to develop sport-utilities of other sizes, mirroring the brand's car strategy.
Expanding the Spartanburg factory could be the beginning of that new-product effort.
Most of the $300 million price tag for the new project will go toward 'machinery to prepare us for future models,' said Bunny Richardson, spokeswoman for BMW Manufacturing Corp. She said that the schedule for bringing on those new products has not been determined.
BMW's push into the sport-utility segment comes after its divestiture of Rover Group, and the sale of Rover's Land Rover unit to Ford. BMW already was planning to develop the X5 in 1994 when the company acquired Rover. That acquisition delayed the X5 project, as BMW executives sorted out Land Rover's position within BMW.
Now that Land Rover is gone, BMW appears intent on pushing ahead with other entries into the sport-utility segment.
Last week's announcement was made in Munich by BMW board member Norbert Reithofer, who had been president of the South Carolina manufacturing subsidiary. Reithofer had managed the X5 from development to production as BMW's first effort in the sport-utility category.
Last year, BMW promoted Reithofer to head worldwide production.
As well as the X5, Spartanburg builds the Z3 roadster and M coupe and roadster.
BMW will build more X5s in South Carolina.