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BMW tie-up may add plant

By Gong Zhengzheng and Wu Yong (China Daily)
Updated: 2008-09-05 09:25

A BMW 3 series car at the Shanghai Auto Show in the file photo taken on April 27, 2007. German luxury carmaker BMW's joint venture with Brilliance China Auto is expected to build a second plant in the Liaoning capital to meet growing demand in the world's second biggest vehicle market, a government official said.[Asianewsphoto]

German luxury carmaker BMW's joint venture with Brilliance China Auto is expected to build a second plant in the Liaoning capital to meet growing demand in the world's second biggest vehicle market, a government official said.

Liu Guoqiang, vice-governor of Liaoning, said yesterday at a ceremony marking the joint venture's fifth anniversary that the new plant will double annual production capacity to 80,000 cars.

Construction of the new factory is expected to begin this year, Liu said.

Friedrich Eichiner, a BMW board member, didn't confirm Liu's remarks yesterday, saying: "It is in the planning process and we are evaluating alternatives."

BMW brand sales on the mainland grew by a quarter year-on-year to 28,766 cars in the first half, including 16,196 units of the 3 and 5 Series sedans from the joint venture.

"We are confident that we will achieve new record sales by the end of the year," Eichiner said. Last year, BMW brand sales on the mainland exceeded 49,300 units.

BMW will increase the number of its authorized dealerships to 120 by the end of this year from 90 last year to boost sales.

Alfred Rupp, CEO of the joint venture, said it plans to source 4.4 billion yuan ($643.56 million) of China-made spare parts this year, up from 3.6 billion yuan in 2007.

He said the joint venture will have a total of 150 local spare parts suppliers by the end of this year, up from 100 last year.

China's booming economy has spurred growing demand for luxury cars.

Audi, Volkswagen's premium brand, sold 59,902 vehicles in China in the first half of this year, an increase of 23 percent from a year ago.

Meanwhile, Mercedes-Benz's China sales surged by 52 percent to 18,000 units.

Overall vehicle sales in China rose by 18.52 percent to 5.18 million units in the first half of this year, according to industry data.

Full-year sales are predicted to hit 10 million units, up from 8.8 million last year.