BMW wants to hike output capacity at Spartanburg site as it chases record sales

Article by Christian A., on March 20, 2014

BMW is seeking to hike production capacity at its Spartanburg site in South Carolina and is launching 12 new models as it tries to post record sales and increase its pretax profit in 2014. BMW's Spartanburg plant has an annual production capacity of around 350,000 and builds makes SUVs like the X3, X4, X5 and X6 models.

"The U.S. will stay a market with great potential for us. This is why we are evaluating the possibility of increasing capacity in the U.S.," chief executive Norbert Reithofer said during BMW’s annual results press conference. The carmaker’s investments in China will enable it to hike production capacity in the country to 400,000 cars, from 300,000 in 2013.

BMW reiterated its target to post a substantial rise in sales volume in 2014, after delivering a record 1.96 million cars last year. "We expect group profit before tax to rise significantly in the current year, despite ongoing volatile business conditions," Reithofer said.

BMW said its automotive division logged a 14-percent drop in fourth-quarter earnings before interest and tax to EUR1.77 billion ($2.46 billion), exceeding analysts’ expectations of EUR1.68 billion. The forecasts were made assuming that political and economic conditions remain stable this year, and that European markets will be on steady recovery, BMW said.

The carmaker is expecting substantial growth in markets outside of Europe, including high single-digit growth in North America and low double-digit growth in China. "We see BMW's confidence as a major positive trigger for the stock," analysts at ISI Global said in a note.

The German carmaker said it expected sales in the second half of the year to be higher than in the first six months due to a large number of model launches, including of the compact 2-series coupe and the 2-series Active Tourer.

Topics: bmw, production

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