GREER — BMW made an expected — but still stunning — announcement that it will expand its only U.S. manufacturing plant with a $1 billion investment to increase capacity 50 percent, add 800 jobs and produce a new, larger SUV for the company's world markets.
The Greer assembly plant "was built to enhance and expand the BMW lineup, underscoring the BMW Group commitment to the United States," said Norbert Reithofer, chairman of the Board of Management, BMW Group. "In addition to the X3, X5, X6, and the new X4, we are today announcing another all-new, larger X model to be manufactured exclusively at this plant for our world markets: the X7."
"We will expand the plant's annual production capacity by 50 percent up to 450,000 vehicles by the end of 2016," Reithofer said.
The 20-year-old plant's current capacity is about 300,000 vehicles and with the expansion will have the largest production capacity of any plant in BMW's global production network, company officials said.
At an event held at the plant today, Reithofer was joined in the announcement by U.S. Secretary of Commerce Penny Pritzker, Gov. Nikki Haley, Harald Krüger, BMW production head, and Manfred Erlacher, president of BMW Manufacturing Co.
The event also celebrated start of production of the all-new BMW X4. In the future, a plug-in hybrid version of the BMW X5 will also be produced at the plant.
The company also used the announcement to celebrate two decades of production in the U.S., a project conceived in the rolling hills along Interstate 85 by the late Gov. Carroll Campbell and others who saw a need — and opportunity — to change South Carolina's textile-based economy.
The expansion is another economic shot in the arm for the Upstate, and the entire state. It joins developments by Boeing Co., which produces 787 jetliners in North Charleston; Michelin North America, based in Greenville and expanding throughout the state; and other automotive and aerospace companies and suppliers operating here.
BMW's payroll numbered 1,900 with an initial capital investment of $444 million when it began operations in Greer in 1994.
Wells Fargo senior economist Mark Vitner told The Greenville Newsthat it's "really hard to imagine where we would be without BMW and the emergence of the automotive industry in the Upstate.
"Not only has it replaced a large portion of the jobs and income lost by the textile industry that dominated the region two decades ago, but BMW has helped encourage a wave of investment in higher-paying manufacturing jobs in the Upstate and other areas."
X7 added to lineup at Greer assembly plant
BMW officials said the additional investment will be used to increase capacity, which they said is necessary to meet global demand for the company's X models.
"The BMW Group strives for a good balance of growth among all markets and continents," Krüger said. The local plant "is an important building block in our international network of 28 production and assembly facilities in 13 countries today and makes a vital contribution to profitable, globally-balanced growth."
He also said, "Our U.S. plant is the best example of our successful strategy of 'production follows the market'. The state of South Carolina has supported us as a valuable and reliable partner throughout our 20-year involvement in the region – making the United States our second home."
The X7 would enable BMW to compete with Mercedes-Benz and Cadillac for sales of three-bench luxury SUVs.
The announcement comes as BMW fights with Mercedes to be the top-selling luxury brand in the United States and with Volkswagen's Audi brand in worldwide sales.
"Every automaker wants to go toe-to-toe against its competition. Not having a full-size, three-row SUV was a hole in BMW's lineup," John McElroy, an auto industry analyst, told The News.
"These vehicles are also extremely profitable, so not only was BMW letting its competitors roam freely in that segment, it was leaving a lot of money on the table."
A site plan BMW filed with the Spartanburg County Planning and Development Department details plans to build a 675,000-square-foot body shop, BMW's third on the campus, near the intersection of Interstate 85 and Brockman McClimon Road.
The plans also show a 371-space expansion of an existing employee parking lot, a new road onto the campus and space for a future "energy center."
BMW Group in Upstate: largest U.S. automobile exporter
BMW officials said the Upstate plant exports, on average, 70 percent of its annual production with a 2013 value of more than $7.5 billion which, according to the U.S. Department of Commerce, makes BMW the largest U.S. vehicle exporter to non-NAFTA countries.
Since production began 20 years ago, in 1994, the Greer plant has produced more than 2.6 million vehicles for BMW customers around the world.
Currently, the BMW X3, X5, X5 M, X6 and X6 M are produced at the plant.
BMW Group economic impact on South Carolina
In addition to the company's large-scale capital investments, a new study released by the Moore School of Business at the University of South Carolina said the BMW Group has a $16.6 billion annual impact on the state economy. Its presence in South Carolina supports more than 30,000 jobs throughout the state.
The study found that for every job created at the BMW plant, an additional three jobs are created elsewhere in South Carolina through the economic multiplier effect.
"This is the fifth expansion since production began 20 years ago and represents another major investment," Erlacher said. "The increase in annual capacity, the number of models produced, and the number of jobs on site, reinforce the major role BMW is playing in the region's economic vitality through technological innovation, environmental stewardship, and development of a highly skilled workforce."
In 2013, 297,326 vehicles were manufactured at the Greer plant, with 1,100 vehicles currently produced each working day. Total employment at the site reached 8,000 in March 2014.
BMW of North America
BMW of North America has had a U.S. presence since 1975.
The BMW Group in the United States has grown to include marketing, sales, and financial service organizations for the BMW brand of motor vehicles, including motorcycles, the MINI brand, and the Rolls-Royce brand; DesignworksUSA, a strategic design consultancy in California; a technology office in Silicon Valley and various other operations throughout the country.
BMW Manufacturing Co. in the Upstate is part of BMW Group's global manufacturing network and is the exclusive manufacturing plant for all X5 and X3 Sports Activity Vehicles and X6 Sports Activity Coupes.
The BMW Group sales organization is represented in the U.S. through networks of 339 BMW dealers, 139 BMW motorcycle retailers, 119 MINI passenger car dealers, and 35 Rolls-Royce Motor Car dealers. BMW (US) Holding Corp., the BMW Group's sales headquarters for North America, is located in Woodcliff Lake, N.J.