BMW strikes back at strong euro by building next X3 SUV in US plant

Mumbai: The world`s largest premium carmaker, BMW, will build the next-generation X3 mid-size sport utility vehicle in its US plant in Spartanburg, South Carolina, the company said to counter the strong euro.

Last year the German carmaker lost €666 million ($902 million) and another 677 million in 2005 because of the strengthening euro.

BMW currently builds Z4 roadsters and X5 SUVs in Spartanburg. It already has decided to build an all-new coupe-shaped SUV crossover in Spartanburg dubbed the X6. BMW sold 31,291 units of the X3 in the United States last year, a marginal gain over the 30,769 delivered to customers in 2005.

The X3, launched in January 2004 and refreshed in September 2006, is assembled in Austria by Magna Steyr, a unit of Canadian car parts giant Magna International.

Norbert Reithofer, chief executive of the German carmaker plans to tel;l shareholders That the company will expand production capacity of its US plant in Spartanburg in the medium term from the current 140,000 to well over 200,000 vehicles per annum. Last year BMW built just 105,000 vehicles in Spartanburg last year.

Reithofer, who initiated the first strategic review at BMW since 2001, said in mid-March the group needs to build up its production volume in Spartanburg to roughly 200,000 units or more in the next two to three years to help hedge against currency fluctuations.

He also confirmed the group`s vehicle sales and earnings forecast for 2007, which foresees a rise in pre-tax profit adjusted for last year's one-off gain on a Rolls-Royce exchangeable bond and sales of over 1.4 million units.