BMW is expanding engine production in China to potentially double capacity as it seeks to close the gap with Audi in the world’s largest car market, reported Bloomberg.
BMW and its joint venture partner Brilliance China Automotive Holdings Ltd. plan to make as many as 400,000 engines a year at a new facility in Shenyang, said BMW. The expansion includes a foundry as part of its push to boost local content.
The additional capacity will help BMW lower shipping costs and avoid taxes on imports. It will also reduce exchange rate risks for the German manufacturer.
BMW’s sales in China rose 20 percent to 391,000 vehicles, while Volkswagen AG’s Audi delivered 492,000 cars, a gain of 21 percent.
The new plant will be located next to a BMW assembly plant in Shenyang’s Tiexi district and replace an existing facility there. It will produce four-cylinder gasoline engines for locally built cars and start production in 2016 with initial capacity of 200,000 units, BMW said. Capacity will rise to 300,000 units a year in the “medium term” and can be expanded to 400,000 if needed, the carmaker said.