Upcoming X6 Part of $25 Billion Product Assault From BMW

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New York Int’l Auto Show

NEW YORK – BMW AG’s Spartanburg, SC, plant is set to get its third model when the X5-based X6 cross/utility vehicle goes into production next year for both U.S. and global markets.

The X6 will be BMW’s ninth vehicle series and bring the brand’s total model count to 48 next year.

BMW U.S. Holding Corp. CEO Tom Purves says the new CUV is one of 30 new models to be launched by 2010, thanks to a $25 billion investment to expand its business. BMW invested $3.3 billion in research and development last year, 5.2% of its worldwide revenues, he says.

About $3 billion has been put into the Spartanburg assembly plant, where capacity will grow from the current 140,000 units to 200,000 units annually “within the next few years,” Purves says at the auto show here. Suppliers have invested another $2 billion in the region.

BMW also is spending $100 million to add about 220,000 sq.-ft. (20,438 sq.-m) of office and training space to its Woodcliff, NJ, headquarters.

BMW’s first-quarter sales grew 6.7% over year-ago to 67,360 vehicles in the U.S. Purves predicts the auto maker will achieve its 16th consecutive year of growth in 2007, but he declines to quote a number, adding BMW currently is constrained on supply of X5, 3-Series and 5-Series models.

Even though he expects the U.S. economy to slow slightly in the second half, Purves believes the premium-car segment should do no worse than remain flat with last year’s totals. He expects BMW to retain its leadership in premium-car sales, but says the brand won’t overtake Lexus overall because the Japanese auto maker sells more SUVs.

“We’ll continue to outsell them in cars,” he says. “But we’re a car company more than a truck company.”

He also notes not many BMW customers migrate to Lexus and few Lexus buyers come over to BMW.

BMW demand should be buoyed by the new ’08 5-Series models that go on sale later this year and get new, more powerful 6-cyl. engines.

Rich Brekus, general manager-product planning and strategy, says the 525i will be updated and rebadged as the 528i. The new engine generates 230 hp and 200 lb.-ft. (271 Nm) of torque.

The 530i gets a twin-turbocharged I6 engine delivering 300 hp and 300 lb.-ft. (407 Nm) of torque. The 550i will retain its 360-hp V-8.

All 5-Series models will offer a 6-speed manual transmission beginning in September. An E-shift automatic is a no-cost option. A new sport automatic transmission with paddle shifters is available to 535i and 550i buyers starting in June.

Purves expects the new 5-Series models to sell “at slightly higher” prices than their predecessors.

The BMW chief says he doesn’t think the lack of diesel engines this year is constraining the auto maker’s business here. But the availability of diesels next year will provide some growth, he says. Purves declines to reveal which BMWs will be offered with diesels.