According to Bloomberg, BMW, Mercedes and Audi AG, the world’s three largest luxury-car makers, will expand factories this year to ease capacity constraints driven by record demand for their vehicles.
Volkswagen AG’s Audi is aiming to overthrown BMW as the world’s bigger maker of premium vehicles by 2015, and plans to increase production for cars and SUV to more than the 1.15 million produced in 2010.
BMW and Mercedes have similar plants with increased production at the Leipzig and respectively Stuttgart plant.
“The top three are poised for further growth,” said Juergen Pieper, a Frankfurt-based analyst with Bankhaus Metzler who recommends buying VW, Daimler and BMW shares. “The momentum in luxury markets will continue this year and also in 2012. It’s a necessity for manufacturers to take steps to address this.”
The increase in automobiles sales is a direct link to the expanding Chinese market which became one of the two largest auto markets in the world. United States continues to remain the largest one. Audi plans to spend 11.6 billion euros ($15.7 billion) through 2015 on plants and new models. BMW has spent 1.5 billion euros alone on its German plants since 2009, while Daimler is building an 800 million-euro small-car plant in Hungary.
While BMW plans over 20 new models in the next five years, Audi said will roll out a total of 13 new models and upgraded vehicles this year.
The VW unit will spend more than 5 billion euros at two German factories in Ingolstadt and Neckarsulm, where the A6 will be built. Audi also said it will begin work this year to expand a factory in Gyor, Hungary, to increase capacity to 125,000 cars.
BMW anticipates record sales in 2011 with more than 1.5 million BMW, MINI and Rolls-Royce models. The Munich-based automaker is spending 400 million euros at its factory in Leipzig, Germany, to prepare for the production of the Mega City electric car by 2013.
Just recently, BMW completed a $750 million expansion of its U.S. factory in Spartanburg, South Carolina, to make room for the revamped X3 SAV. BMW is also expanding capacity in China, India, and South Africa.