BMW Plans to Double Engine Production in China image

BMW aims at doubling annual production of engines in the world’s largest auto market, China.

Recently, BMW Brilliance, the JV between BMW and Brilliance China Automotive, announced it will create a second engine plant in China and double production of engines at the actual facility from 200,000 units to 400,000 in the following years. The company did not reveal how much it will invest for the second plant which is expected to begin production in 2015.

BMW and Brilliance began manufacturing cars in China in 2003, and now the JV has two facilities in the country, located in the northeastern city of Shenyang. Although China’s auto market begins o be affected by a slowdown, auto makers’ sales still surge due to the growing ranks of China’s millionaires. In 2011 premium-car sales were up 32%, although the industry grew only 2.5%.

But as China’s economy continues to slow and competition becomes tougher, analysts predict a slowdown in premium-car sales and dealers have already begun to offers discounts for luxury cars customers. Even BMW declared in a press conference this week that competition in China is ‘intense’ and that price pressure has worsened in the past months. From January to June BMW sold 159,358 units in China, up 31% from 2011.