BMW plans to open second plant in China

Beijing Times reports Wednesday that BMW Group is secretly planning to open the second plant with Shenyang-based Brilliance Automotive Corp, while Shanghai General Motors Co Ltd suspended its Cadillac project and rumors are swirling about the halt of Beijing's Mercedes-Benz project due to China's imported policy of auto parts.

The president of BMW Group came to China secretly and reached an agreement on an increase of investment and production, according to Brilliance Automotive Corp.

Shanghai General Motors Co Ltd, General Motors' only car venture in China, announced it would halt the Completely Knocked Down (CKD)assembly of Cadillac, and turn to import. And Beijing Benz-DaimlerChrysler was busy clarifying it would not stop the production in Beijing.

BMW Group's launch of expansion scheme in China is undoubtedly a heavy blow to European and US auto makers, especially to high-end luxury auto makers.

If the Shenyang plant, built three years ago, could reach the full capacity of 30,000 units annually, BMW Group would expand its investment in China to build another plant, according to BMW Group's plan at the beginning of this year.

Besides the expansion of production capacity, BMW will accelerate localization of auto parts. It will increase the value of auto parts it purchases in China from 870 million yuan last year to 3 billion yuan this year and increase the local supplier from over 40 to more than 80 this year, said Eberhard Schrempf, CEO of BMW Brilliance Automotive Ltd.

By People's Daily Online