BMW Lays Groundwork For Expansion Plans

Luke Vandezande
by Luke Vandezande

BMW is pushing forward in the face of what many economists are fervently discussing in the business world: the possible collapse of the euro.

Such a catastrophic event is unlikely, BMW CEO Norbert Reithofer told Automotive News. He reaffirmed that strong belief in another interview saying “I don’t even want to imagine that at all, and I don’t believe it will happen.” In fact, BMW is planning significant expansion.

The company is intends to increase sales by 25 percent despite the fact that research group IHS Automotive forecasts as much as a 41 percent overcapacity for vehicles in Europe. Regardless of softening sales in the European market, BMW remained the top luxury car manufacturer this year and is planning to expand on their 1.6 million unit sales for 2011 to a whopping 2 million by 2020.

They plan to achieve that goal by further expanding into the international market. Part of that plan involves setting up a factory in Brazil, but more significantly, BMW is eyeing the growing Chinese market.

Proportionally, Chinese consumers drive about the same number of economy cars as Europeans, but the difference is that Reithofer says 75 percent of Chinese economy car owners want to upgrade for their next purchase.

“In 2012, the BMW brand will have the youngest model range of all of our core competitors by far,” Chief Executive Norbert Reithofer told reporters on Thursday evening at an event in Munich. It’s something he hopes will entice the young and increasingly wealthy Chinese market segment.

If it turns out that BMW is being too aggressive in their expansion, they can scale back produciton by 20 to 30 percent according to Frank-Peter Arndt, BMW’s production chief.

[Source: Automotive News]

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