DETROIT - BMW AG will boost capacity at its U.S. plant in Spartanburg, S.C., in the next few years to near 200,000 units to accommodate production of the new X3 sport wagon and rising demand for the current X5 sport-utility, senior executives said here last week.
Another possibility that would put pressure on the U.S. plant is a proposed X7 full-sized sport-utility, a program still under review.
The U.S. plant, which has a nominal capacity of 120,000 units a year, will build about 80,000 X5s and about 35,000 Z3 roadsters this year, the executives said.
Production could end
But the new vehicles and the bump in output will squeeze the Z3 out of the Spartanburg plant - and could push it out of production altogether, officials suggested.
'The next-generation Z3 will be built in Spartanburg; then, at the end of its cycle, we will replace it with the X3,' Norbert Reithofer, board member responsible for worldwide production, said during a meeting with Automotive News editors and reporters last week. 'We will then have to face what to do about the Z3.'
The redesigned Z3 goes into production next year. Assuming a four-year product cycle, it could be replaced in Spartanburg by 2006.
Reithofer disclosed that the automaker had considered shifting the Z3 to Regensburg, Germany, as part of a plan to consolidate BMW's convertible production there. That was ruled out because market research showed that the Z3 had become 'uniquely American' in buyers' eyes worldwide, he said.
'We didn't want to risk diluting that identity by building the car in Germany,' he said. 'That gives us a problem about what to do with it at the end of the next cycle.'
Spartanburg also builds a low volume of Z3 variations, the M roadster and the M coupe.
No 10 series
On another topic, BMW Chairman Joachim Milberg said the automaker felt no need to develop a new range-topping car, a so-called '9 series' or '10 series,' to fill the price gap between the 7 series and Rolls-Royce models.
BMW is scheduled to take over the luxury British marque from Volkswagen AG on Jan. 1, 2002 and is developing a new model for the brand. In addition, BMW will continue to source current Rolls-Royce models from the Crewe, England, factory, which will remain in Volkswagen hands.
'No, we don't need a 9 series or 10 series model because there is no gap to fill,' Milberg said.
'Rolls-Royce is a separate brand from BMW; it's an unrelated purchase decision. The 7 series tops the BMW lineup, and it's a premium product. Our customers don't feel the need for anything larger.'
Milberg also said the company has recovered nicely from the debacle of its takeover, and later distress sale, of Britain's Rover Group.
'Outside of some minor items, the cost of disposing of Rover has been fully accounted for. Our finances are strong,' he said.
Milberg reiterated that BMW's core strategy is to capture the premium halo in every segment it enters, from subcompacts through light trucks to large sedans.
'A BMW can be a small car, but it has to be the best small car in the segment,' he said. 'We cannot do anything to harm our reputation for producing premium products. That reputation is the very foundation of our livelihood and success.'