SPARTANBURG, S.C. -- BMW's decision to approve the seven-seat X7 crossover was driven by competitive pressure -- especially in the United States, says CEO Norbert Reithofer.
"We cannot just ignore a market for a BMW product," he said at a press briefing Friday before a ceremony to announce a $1 billion, 100,000-unit expansion to BMW's factory here.
"One of our competitors is alone with such a vehicle in the premium segment, and the competition needs at least a second one," Reithofer said, referring to the Mercedes-Benz GL, which is built in Alabama. Mercedes-Benz sold 29,912 GLs last year, up 15 percent from a year earlier.
The decision to approve the X7 was made a year ago, he said.
Reithofer provided no specifics on the vehicle. But insiders said it would go on sale in 2017 or 2018.
The United States and China will be the biggest markets for the X7, which will be based on BMW's large vehicle architecture.
Harald Krueger, BMW board member for production, said the X7 will not account for the entire 100,000-unit increase in capacity at Spartanburg. BMW was constrained by how many crossovers it could produce because of the paint shop's 350,000-unit capacity. The expansion will include an extended paint shop, which means the plant can produce more X3, X4, X5 and X6 crossovers.
Reithofer also said BMW will produce an X5 plug-in hybrid in Spartanburg using technology and knowledge from its i electric vehicle and plug-in hybrid subbrand. The X5 plug-in hybrid will go on sale in the United States next year. Further details were not released.
BMW continues to add crossover models and derivatives because of their growing popularity and because of vehicles launched by the competition, Reithofer said. "We have to ask, 'What are the right products for us?', and we think the X7 is the right product to add to our X family," he said.
Reithofer said he sees no risk in further investment in the United States because the market will soon return to prerecession levels.
"A lot of people said the market would not come back," he said. "I said it will come back and be a very important market in the future."
Krueger said BMW has no plans to add a stamping plant in Spartanburg because of its "good relationship" with supplier Magna International. It also has no plans to add an engine factory there, he said.
The latest expansion of Spartanburg will make it BMW's biggest plant, exceeding that of the company's Dingolfing, Germany, factory, which has a capacity of 350,000 units.
Spartanburg's current capacity is 350,000 units, with the latest expansion taking it up to 450,000. Last year, the plant produced 297,326 vehicles.