MUNICH - BMW will build a new small sport-utility vehicle either at Steyr Fahrzeugtechnik in Graz, Austria, or at Wilhelm Karmann GmbH in Osnabruck, Germany, say BMW sources.
Preparations for the vehicle, which may be called X3, are well advanced. The small sport-utility should be ready for production by 2002.
A decision on where to build it could come as early as next week.
BMW sources say it will not be built in one of the company's own plants, because they are at full capacity.
Steyr and Karmann emerged from a long list of potential contract manufacturers.
Steyr has experience building four-wheel-drive vehicles for Puch, Jeep and Mercedes-Benz. Burkhard Goeschel, vice president research and development for BMW, recently visited Steyr facilities in Graz.
Karmann builds about 100,000 niche vehicles per year, including the VW Golf cabriolet and Mercedes-Benz CLK cabriolet.
BMW sources say a deal with one of the companies may be announced by the time Bavarian Prime Minister Edmund Stoiber visits Graz on October 6.
Sources say the X3 could be built at a new production complex Steyr plans in Ilz, Austria.
Sources say BMW could build as many as 80,000 of the new sport utilities a year. It is also planning a flagship SUV called X7.
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