German carmaker BMW AG and its Chinese partner Brilliance Automotive Holdings Ltd on Thursday 12 November said they planned to invest 5 billion yuan (735 million US-Dollars) to expand joint-venture production in China.
BMW’s chief finance officer Friedrich Eichiner hailed the agreement as an “important strategic step” that would also help BMW to reduce the effects of fluctuations in currency exchange rates.
The two firms currently produce several BMW Series-3 and Series-5 models in Shenyang, where they are scheduled to start building the second plant next year with production lines operating from early 2012.
BMW said this week that sales in China of its own-name and Mini-brand autos soared 81 percent in October from a year earlier to a monthly record of 9,558 units, without providing a comparative figure for 2008.
That compares with an anaemic two percent increase in overall global sales.
China sales in the January-October period jumped 36.7 percent to 71,952 units from 52,622 units a year earlier, BMW said.
But with most major manufacturers of passenger cars planning rapid expansion of production, officials have warned that the excitement inChina’s auto industry might be encouraging overexpansion that could lead to a glut of cars.