BMW to build next X3 in U.S. to counter strong euro

BMW X3 | May 16th, 2007 by 3

MUNICH (Reuters) – BMW (BMWG.DE), the world’s largest premium carmaker, will build the next-generation X3 mid-size sport utility vehicle in its U.S. plant in Spartanburg, …

MUNICH (Reuters) - BMW (BMWG.DE), the world’s largest premium carmaker, will build the next-generation X3 mid-size sport utility vehicle in its U.S. plant in Spartanburg, South Carolina, the company said on Tuesday.
“We will expand the production capacity of our U.S. plant in Spartanburg in the medium term from the current 140,000 to well over 200,000 vehicles per annum,” Chief Executive Norbert Reithofer said in a copy of a speech to be given at the carmaker’s annual general meeting.

Reithofer confirmed the group’s vehicle sales and earnings forecast for 2007, which foresees a rise in pretax profit adjusted for last year’s one-off gain on a Rolls-Royce (RR.L) exchangeable bond and sales of over 1.4 million units.

The X3, first launched in January 2004 and refreshed in September of last year, is assembled in Austria by Magna Steyr, a unit of Canadian car parts giant Magna International (Toronto:MGA.TO – news).

BMW now builds Z4 roadsters and X5 SUVs in Spartanburg. It already has decided to build an all new coupe-shaped SUV crossover in Spartanburg dubbed the X6.

Reithofer, who has initiated the first strategic review at BMW since 2001, said in mid-March the group needs to build up its production volume in Spartanburg to roughly 200,000 units or more in the next two to three years to help hedge against currency fluctuations.

It built just 105,000 vehicles in Spartanburg last year.

Partly as a result, the company suffered adverse forex headwinds of 666 million euros ($902 million) in 2006 and another 677 million in 2005 given the strong euro.

BMW sold 31,291 units of the X3 in the United States last year, a marginal gain over the 30,769 delivered to customers in 2005.

Overall the group sold 114,000 units of the X3 last year worldwide, a gain of 3.0 percent.

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