BMW Expansion Culminates $1 Billion Investment in US Auto Market

Last week, BMW Group opened a new 1.2 million square feet manufacturing facility in Spartanburg, South Carolina.

The Plant Spartanburg expansion cost upwards of $750 million and will allow the company to beef up production of the new BMW X3. The facility improvements included construction of a new assembly hall for the X3 and expansion of the Body and Paint Shops for higher production capacities. As a result of these upgrades, BMW expects Spartanburg's production capacity to increase by 50 percent from 160,000 to 240,000 units by 2011.

The company says 1,600 new employees will be needed to support the increased production. About 1,000 have already been hired, and the remainder will be hired by the end of the year. These new hires will increase the total number of jobs at the plant to 7,600.

(As an interesting side note: BMW also announced that it is implementing a new alternative fuel platform to use Hydrogen Fuel Cells to power their material handling equipment at the plant. BMW will be using hydrogen fuel cell-powered forklifts, tuggers and stackers.)

All told, BMW Group has invested one billion dollars in the US auto market over the past two years. The balance of these funds was used to expand and modernize BMW Group's US headquarters campus in New Jersey and to build two new regional distribution centers in the Northeast and Midwest in 2008 and 2009.

Expansions like these are generally positive news for automotive suppliers, and it's worth noting that many now appear to be cautiously optimistic about the US vehicle market. For example, the July 2010 OESA Automotive Supplier Barometer detected a mostly positive outlook for 2011. Eighty-four of the 101 survey respondents said they expect an increase in revenue and EBIT in 2011. In addition, 68 percent reported that they are planning to increase capital spending next year a move that will deepen the capital base and allow North American suppliers to remain globally competitive and meet expanding market opportunities.