FRANKFURT -- German luxury carmaker BMW is considering building its planned sports wagon at its U.S. plant in South Carolina, German newspaper Die Welt reported on Friday citing informed industry sources.
Building the model in the United States would help protect the company from foreign exchange fluctuations without the use of expensive financial instruments.
Many analysts are forecasting BMW's earnings will drop by the hundreds of millions of euros next year due to the continued slide in the U.S. dollar, which fell to a record low against the euro on Friday.
Currently, the company builds the popular X5 SUV and the sleek Z4 roadster cabrio in Spartanburg, S.C.
"A final decision has not yet been reached," a spokesman for BMW said on Friday.
BMW has repeatedly stated it does not intend to use longer-term currency derivatives at current rates to protect its earnings from foreign exchange movements since it believes the U.S. dollar is significantly undervalued to the euro.
Chief Executive Helmut Panke said in late October that he expects the dollar to strengthen significantly by then end of next year.
For the coming year, BMW has said its net export exposure is one-third hedged, not including short-term "tactical" contracts, down from more than two-thirds hedged in 2004.
Panke told Reuters in October that a decision would be reached by the end of 2005 over whether to build the sports wagon, which is seen as BMW's answer to the new Mercedes R-class grand sports tourer.
DaimlerChrysler's luxury unit has said it would build the new R class in the United States, where the company currently manufactures the M-class offroader.