BMW's sole U.S. assembly plant is preparing to launch a hybrid version of the X6 sports coupe at the end of 2009, said Josef Kersher, president of BMW Manufacturing Co. in Spartanburg, S.C. But that doesn't mean the automaker is losing faith in U.S. buyers' eventually embracing diesel vehicles, he said.
More than half of the X5 crossovers built in Spartanburg are diesels, Kersher said. Today, the vast majority of those are shipped overseas, he said.
The plant supplies all the X5s and X6s for the world market, Kersher said.
Speaking at the Management Briefing Seminars here, Kersher said BMW has faith that Americans will buy diesels if they give them a try. Getting those consumers to consider diesels will require more aggressive marketing and dealer demonstrations to show that diesels are clean, fuel-efficient and powerful, he said.
"I don't think Americans are used to this modern diesel technology," Kersher said on the sidelines of the forum yesterday. But it remains popular in Europe and in many other parts of the world, he said.
A key to weathering the current economic downturn is having the manufacturing flexibility to produce vehicles for any market at a moment's notice.
BMW had its second-best sales year in 2008, despite the recession in North America and Europe, Kersher said.
BMW is famous for its build-to-order manufacturing processes that permit a customer to change accessories on an order up to five days before the vehicle is built.
That flexibility allowed the South Carolina plant to change the mix of its vehicles for export overnight from about 50 to 70 percent, Kersher said. Also last year, the factory received orders from China over a six-week period that was triple the normal level for that time frame, and it met the orders without missing a beat, he said.
Along with other automakers, BMW's sales are down. They fell 27.4 percent in the United States in the first seven months of the year to 135,911 units and dropped 19.5 percent worldwide in the first half, Kersher said.
About 80 percent of the vehicles built in Spartanburg are built to order to customers' specifications.
With vehicle sales expected to rebound differently in various regions of the world, maximum flexibility at Spartanburg will enable BMW to get vehicles to those markets quickly as demand rises, Kersher said.
BMW has a $750 million expansion of Spartanburg under way that will increase capacity to about 200,000 in the coming months from 150,000 today, Kersher said.
The investment is a reflection of BMW's optimism that premium crossovers will remain popular, he said.
The expansion also will enable BMW to achieve new benchmarks in supplier efficiency, Kersher said. The way the plant is configured, suppliers will be able to deliver 77 parts directly to the assembly line. Only 19 percent will be stored in warehouses before going to the line, he said. The other 4 percent are engines that are imported and must be put in sequence for assembly into vehicles.