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BMW eyes U.S. production hike in push for sales record

March 19, 2014

By Edward Taylor, Victoria Bryan and Mark Potter

MUNICH (Reuters) – German luxury carmaker BMW <BMWG.DE> is looking at raising production capacity at its plant in the United States and releasing 12 new models as it chases record car sales and a rise in pretax profit in 2014, it said on Wednesday.

BMW’s plant in Spartanburg, South Carolina currently has an annual production capacity of around 350,000 and makes sport utility vehicles, including the X3, X4, X5 and X6 models.

“The U.S. will stay a market with great potential for us. This is why we are evaluating the possibility of increasing capacity in the U.S.”, Chief Executive Norbert Reithofer said at the company’s annual results press conference.

Investments made at plants in China will allow BMW to raise production capacity there to 400,000 cars, from 300,000 in 2013.

The Munich-based owner of the Mini, Rolls-Royce and BMW brands reiterated it aims to achieve a significant rise in sales volume in 2014, after it delivered a record 1.96 million cars in 2013.

“We expect group profit before tax to rise significantly in the current year, despite ongoing volatile business conditions,” Reithofer said.

Last week, BMW reported its automotive division’s fourth-quarter earnings before interest and tax (EBIT) dropped 14 percent to 1.77 billion euros ($2.46 billion), beating analyst expectations of 1.68 billion euros.

The forecasts are based on the assumption that political and economic conditions remain stable in 2014, and on a steady recovery in European markets, BMW said.

BMW expects significant growth in markets outside of Europe including high single-digit growth in North America and low double-digit growth in China.

Analysts welcomed the positive outlook.

“We see BMW’s confidence as a major positive trigger for the stock,” analysts at ISI Global said in a note on Wednesday.

At 0950 GMT, BMW shares were up 5.1 percent at 84.88 euros.

BMW said it expected sales in the second half of 2014 to be higher than in the first six months as a result of a large number of model launches, including of the compact 2-series coupe and the 2-series Active Tourer.

(Reporting by Edward Taylor; Editing by Victoria Bryan and Mark Potter)

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