China Daily reported that BMW Group will almost double the investment in its new Shenyang factory to around EUR 1 billion to enable higher production and increased local content.
With its JV partner Brilliance Auto, BMW started construction on the new plant in the capital of Liaoning province in the middle of 2010. At the time the announced investment was EUR 560 million.
The additional investment will be shared between the two partners and used to build press and paint shops and to expand infrastructure at the new plant in Tiexi district of Shenyang.
According to BMW, the new factory will have an initial capacity of 100,000 cars a year when it is completed early next year. Planned products made at the facility include the X1 SUV.
Mr Olaf Kastner president & CEO of the joint venture BMW Brilliance Automotive said that "The plant is being built in record time. We have never before built a plant in such a short time of 18 months."
BMW has an existing factory in Dadong district of Shenyang that makes a total of about 75,000 3 Series and 5 Series sedans annually. The figure is set to increase to more than 100,000 in the near future. Over the long term, the two plants will have the combined potential to make more than 300,000 vehicles a year depending on market trends. Mr Kastner noted in the previous interview that the company will remain flexible so we can raise production but if necessary we can also scale back. That flexibility will give the company a competitive edge.
In April 2011, BMW sold 20,800 cars in China, up by 67% YoY. For the first four months, the company reported deliveries of nearly 80,000 cars, up by 70% over the same period last year. China is BMW's third largest market following Germany and the US. Other luxury carmakers are also adding capacity as demand increases.
Audi now has an annual production capacity of 200,000 units in China at its joint venture with parent Volkswagen Group and local partner FAW Group. It has announced plans to double capacity to 400,000 units as it aims to move 1 million cars in total from 2011 to 2013. The luxury unit of Volkswagen sold 23,800 cars in China last month, up 22 percent over the same period last year. Mercedes Benz aims to boost production capacity in its Beijing joint venture to 300,000 units a year by 2015. The company's mainland sales surged 77% to more than 61,000 cars between January and April 2011. It moved 17,180 cars in April 2011 alone.