BMW will build a new factory in Brazil in order to meet global growing demand following record sales this year, the company’s CEO announced.
According to Norbert Reithofer, BMW is still deciding on a site for the plant, which will help BMW increase its sales to 2 million units by 2020 from 1.6 million this year. Reithofer revealed BMW has been considering building a factory in Brazil for months as it aims to balance growth and avoid depending too much on a single market.
The Munich-based carmaker expects sales to grow in the U.S., China and Europe next year, unless the global economy takes some serious hits. Compared to the 2009 recession, Reithofer said BMW is better prepared for a potential crisis because it has lowered production costs and has a better financial cushion. He stressed that profit in 2011 will rise significantly to a record level and that BMW’s earnings before interest and taxes will reach at least 10 percent of sales.
For 2012, Reithofer said he expects slight growth in Europe, fueled by demand in the northern area of the continent. He added the company is on standby to lower production in case demand falls. BMW’s production chief Frank-Peter Arndt said in October that the automaker can reduce output by 20 percent to 30 percent if necessary.