BMW is expanding its engine production capacity in China by up to 400,000 units annually. BMW and joint-venture partner Brilliance China Automotive Holdings are set to operate a new engine facility in Shenyang, which now includes a foundry. The additional capacity is seen to help BMW lower shipping costs as well as avoid taxes on imports.
The move likewise will help reduce exchange-rate risks for the German carmaker. BMW posted a 20-percent rise in sales in China to 391,000 vehicles, while Audi logged a 21-percent gain to 492,000 cars.
The new engine plant will be located next to a BMW assembly plant in Shenyang's Tiexi district. It will replace an existing facility in the location. The new site will build four-cylinder gasoline engines for locally built cars and commence production in 2016 with initial capacity for 200,000 units.
BMW said the plant’s capacity will surge to 300,000 units a year in the "medium term" and can be expanded to 400,000 if needed.
The engine production expansion mirrors plans for auto assembly in China as BMW intended to hike production capacity to around 400,000 vehicles in the coming years from 200,000 this year. BMW’s first production facility in Tiexi currently plant supplies engines to the car-assembly facilities of BMW's joint venture with Brilliance in Shenyang's Dadong and Tiexi districts.