BMW AG will build the next-generation X3 cross/utility vehicle at its U.S. plant in Spartanburg, SC, ending the run for the vehicle at Magna Steyr Fahrzeugtechnik AG & Co. KG’s site in Graz, Austria.

BMW says it will expand capacity at Spartanburg “in the medium term” from 140,000 units annually to more than 200,000 per year.

Magna has been producing the X3 since 2004 and its contract to build the CUV runs out in 2010-2011.

BMW told Ward’s in January it was considering migrating the next X3 to the Z4 sports car’s architecture, which would accommodate production at Spartanburg, where the Z4 is produced.

Exchange rates likely are playing a role in the shift.

Klaus Borgmann, head of BMW’s small-vehicle product lines, said earlier this year that if the X3 is moved to the U.S. plant, it may study building a different vehicle at the Magna plant.

“The Graz people are good. Maybe we will build other cars in Graz,” he told Ward’s.