BMW Returns Production Levels To Pre-Recession Norm

[JoshCalkins]

2009 BMW 120i

Last November, BMW limited the production of its plant in Leipzig, Germany, cutting back from two shifts per day to one. Now, the company has announced its intentions to reopen the plant for two full production shifts starting in June. It may seem a bit overly optimistic for the company to expect to have sales to justify this production, especially since they reported considerable losses in teh last two financial quarters, but BMW will press on anyway.

The reason for the increase is twofold: first, the demand for the 1-Series has been incredibly high over the past few months. Many drivers who want to get a BMW car but can't afford a 3-Series or 5-Series are turning to the smaller sedan and coupe as a less-expensive alternative. Second, the Leipzig plant will be responsible for the production of the X1 (the X5 and X6 are produced in Spartenburg, South Carolina, US, and the X3 is produced in Austria by Magna Steyr, under contract to BMW), which will be launching later this year.

BMW X1

Aside from the aforementioned sales of the 1-Series and some debut sales from the X1, BMW is also looking to expand into new markets in order to bolster their sales figures, with the most notable new market being China. Norbert Reithofer, BMW's Chief Executive, said in a message to shareholders that premium vehicles only represent between 1-2% of the auto market in China at the moment. However, as the Chinese economy continues to grow, BMW expects that number to increase drastically, and they want to be well positioned to take advantage when the time comes.