German Luxury cars

Topics: Automotive industry, Porsche, Volkswagen Group Pages: 9 (3992 words) Published: May 25, 2014

German Luxury-Car Makers Look Beyond Home Market
BMW to expand Plant in U.S., Daimler Will Boost Investment in China Venture By William Boston and Neal E. Boudette Updated March 28, 2014 2:56 p.m. ET

A new BMW X4 is unveiled last Friday at the BMW manufacturing plant in Greer, South Carolina as the Germany luxury auto maker announced a $1 billion expansion for the plant. Associated Press German luxury car manufacturers BMW AG and Daimler AG have unveiled plans to spend billions on new car factories, everywhere, it seems, except in Germany. The shifting poles of the global automobile market are pulling Germany's biggest car makers far from home as they rush to maintain their dominance of the world-wide market for premium cars. Demand for high-end cars is growing faster than the broader market and it is strongest for Mercedes, Audi and BMW sedans and sport-utility vehicles and Porsche sports cars. Together, these German manufacturers control nearly 80% of the global market for premium cars, according to industry estimates. In the past, Germany exported its iconic cars. But for years, the Germans have been ramping up production in plants from Changchun, China, to Chattanooga, Tenn., at a faster pace than in their factories back home. Since 2000, production abroad by German car makers has surged 134% to 8.6 million vehicles last year. During the same period, production in German car factories grew just 6% to 5.4 million vehicles. Demonstrating the new mobility of Germany's big car makers on Friday, BMW's chief executive, Norbert Reithofer, climbed onto a stage in Spartanburg, S.C., to unveil a $1 billion expansion of the company's U.S. plant, BMW's largest factory world-wide. The Munich-based premium-car maker will assemble a new, large SUV, dubbed the BMW X7, along with the four other types of SUV already assembled there. BMW will add 800 jobs to a payroll that already exceeds 8,000—more than any other auto plant in the U.S. Once the expansion is complete, the Spartanburg plant will be able to produce as many as 450,000 vehicles a year. In 2013, the factory made nearly 300,000 vehicles, and exported 70% of its output. "This expansion means that Spartanburg will have the largest production capacity of any plant in our global production network," said Mr. Reithofer during the ceremony celebrating the 20th anniversary of BMW's Spartanburg plant. As BMW was celebrating that anniversary, Dieter Zetsche, chief executive of the company's German rival Daimler, huddled with the leaders of China and Germany in Berlin and signed an agreement to invest €1 billion ($1.38 billion) to more than double production at its Chinese joint venture, Beijing Benz Automotive Co., or BBAC. The investment is part of a plan announced in August by Daimler and its Chinese partner, Beijing Automotive Industry Corp., to invest €4 billion to expand BBAC's operations. In Berlin, Daimler said that the money would go to double output of Mercedes C-class, E-class and GLK models to 200,000 in 2015 when the compact GLA model goes into production in China next year. BMW, Daimler AG's Mercedes-Benz division and Audi AG, which is owned by Volkswagen AG , are in a global race for leadership in luxury autos. All three are rushing to increase production capacity to fuel future growth, which they increasingly find outside Europe. The U.S. is still the biggest car market by value, even if China has moved into the top spot by volume. Car sales are expected to rise nearly 7% in China this year to about 17 million vehicles. In the U.S., light vehicle sales are seen rising 3% to about 16 million vehicles, while Western Europe is expected to be nearly flat at 11.7 million. In addition to expanding capacity in Spartanburg, BMW also is building a small assembly plant in Brazil and working to boost output in China. The U.S. is proving increasingly important market for all three, and a key production location. Mercedes-Benz, which is owned by Daimler, recently expanded...
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