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 BMW's plant in Spartanburg, South Carolina, is being readied to
reach an annual production capacity of around 350,000 vehicles, up
from 300,000 at the end of 2013. It 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 on Wednesday.
Analysts welcomed the outlook from the Munich-based owner of the
Mini, Rolls-Royce and BMW brands.
"We see BMW's confidence as a major positive trigger for the stock,"
analysts at ISI Global said in a note to clients.
"The company has long been known for its conservative guidance and
after a period of rather flat profit development, it's interesting
that it has chosen to be so confident," analysts at Bernstein
Research said.
BMW shares surged on the news, closing 7.3 percent higher, at 86.60
euros, making it the second-biggest gainer on the pan-European
FTSEurofirst 300 index <.FTEU3>.
Reithofer declined to give a figure about future production levels
at Spartanburg, or comment on whether BMW is thinking about
producing a new model, the X7. The carmaker said it will make a
further announcement about its U.S. plans on March 28.
Investments made at plants in China will allow BMW to raise
production capacity there to 400,000 cars, from 300,000 in 2013.
BMW reiterated its aim to achieve a significant rise in sales volume
in 2014 to 2 million or more, 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, adding that the margin targets for the automotive
division remain unchanged.
BMW said it expects spending on research and development to be
closer to 5 percent and 5.5 percent of group revenue between 2014
and 2016, compared with around 6.3 percent in 2013.
Profit will rise because BMW will save costs by producing most of
its cars using two common architectures, a front-wheel drive and a
rear-wheel drive version, Reithofer said.
Chief Financial Officer Friedrich Eichiner later said a "significant
rise" meant "somewhere in the range of a high single-digit and a
double-digit amount."
Last week, BMW reported a 1.4 percent rise in full year pretax
profit to 7.91 billion euros.
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The forecasts for 2014 are based on the assumption that political
and economic conditions remain stable and on a steady recovery in
European markets, BMW said.
BMW expects significant growth in markets outside Europe
including high single-digit growth in North America and low
double-digit growth in China.
The car maker 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 the compact 2-series coupe and the
2-series Active Tourer.
By using the same underpinnings as BMW, the Mini brand will be able
to develop a range of new vehicles, board member Peter
Schwarzenbauer said, declining to elaborate what the future variants
may be.
A key part of BMW's push is to launch emissions free vehicles, such
as the i3 electric car and an electric scooter.
Later this year BMW is launching the i8, a hybrid sportscar made of
carbon fiber, with a starting price of around 126,000 euros and an
initial production run of 1,000 vehicles, BMW board member for sales
and marketing Ian Robertson said.
BMW will make greater use of carbon fiber in other models from its
vehicle range, and is developing the next generation Z4 roadster
together with Toyota Motor Corp.<7203.T>, Robertson said.
Separately, BMW published its annual report, which showed that CEO
Reithofer received total compensation of 7.03 million euros in 2013,
a 6 percent increase on the previous year.
(Reporting by Edward Taylor; editing by Erica Billingham and David
Evans)
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