BMW in Upstate poised for busy year after slight decline in 2013

Greenville NewsJanuary 11, 2014 

FILE PHOTO: A BMW employee works on the underbody of a BMW X5 inside the BMW Manufacturing Company in Greer.

FILE/GERRY MELENDEZ — gmelendez@thestate.com Buy Photo

BMW said Friday that annual production at its Upstate assembly plant declined slightly in 2013, which economists said was more a bug on the windshield than anything else.

Workers at BMW Manufacturing Co. in Greer produced 297,326 vehicles last year, off 1.4 percent from the record 301,519 assembled in 2012.

The new production statistics come as the company begins one of its busiest years since launching production in 1994 — with the hiring of hundreds of contract workers to staff a $900 million expansion project and the rollout of a new model.

The factory expansion and additions to the head count will push BMW Manufacturing’s production capacity to 350,000 by the end of this year.

Steve Wilson, BMW Manufacturing spokesman, attributed the production decline to the launch of the third generation of the X5 sports activity vehicle in August.

“This is normal when you introduce a new model. There is always a period of several weeks where you slowly increase production to ensure processes are working correctly and quality is high,” he told The Greenville News.

The slight production decline in a generally up year for U.S. auto plants “is not that much to worry about,” said Mark Vitner, senior economist for Wells Fargo Securities in Charlotte.

“I am more encouraged by the ongoing expansion of BMW in the Upstate, the opening of the Inland Port (in Greer), and improved economic outlook for the U.S. and global economies in 2014.”

In 2012, the Upstate plant was No. 2 in BMW’s manufacturing universe to the Dingolfing, Germany, factory that cranked out 332,700 units.

BMW will begin production of the X4 sports activity coupe this year, joining the X3, X5 and X6 models at the Greer plant.

Wilson said the plant expects production to go up this year with the launch of the X4 and anticipates “continued strength in our other X models, particularly the X3 and X5.”

Vitner said the Greer plant “has greatly exceeded expectations since it arrived in South Carolina. The plant has been continuously expanded and has helped the state land a whole host of suppliers and likely paved the way for other industries to expand in the state.

“I personally believe that the success that BMW has had in South Carolina is one of the reasons Boeing chose to expand in Charleston.”

Vitner said he doesn’t think the Upstate is too reliant on BMW and the automotive sector that includes Michelin and dozens of parts suppliers.

“We are fortunate in that BMW exports a large proportion of their output and that they produce a product that consistently sells at a premium. This helps insulate the region’s economy from what is otherwise a notoriously cyclical business,” he said.

“BMW is not immune from the auto cycle but, with much of their product headed overseas, their Upstate operations are better able to withstand swings in the U.S. business cycle.”

Wilson said BMW Manufacturing’s exports for 2013 totaled 210,760 vehicles, just more than 70 percent of production.

“That’s consistent with the past few years,” he said. Staff writer BMW said Friday that annual production at its Upstate assembly plant declined slightly in 2013, which economists said was more a bug on the windshield than anything else.

Workers at BMW Manufacturing Co. in Greer produced 297,326 vehicles last year, off 1.4 percent from the record 301,519 assembled in 2012.

The new production statistics come as the company begins one of its busiest years since launching production in 1994 — with the hiring of hundreds of contract workers to staff a $900 million expansion project and the rollout of a new model.

The factory expansion and additions to the head count will push BMW Manufacturing’s production capacity to 350,000 by the end of this year.

Steve Wilson, BMW Manufacturing spokesman, attributed the production decline to the launch of the third generation of the X5 sports activity vehicle in August.

“This is normal when you introduce a new model. There is always a period of several weeks where you slowly increase production to ensure processes are working correctly and quality is high,” he told The Greenville News.

The slight production decline in a generally up year for U.S. auto plants “is not that much to worry about,” said Mark Vitner, senior economist for Wells Fargo Securities in Charlotte.

“I am more encouraged by the ongoing expansion of BMW in the Upstate, the opening of the Inland Port (in Greer), and improved economic outlook for the U.S. and global economies in 2014.”

In 2012, the Upstate plant was No. 2 in BMW’s manufacturing universe to the Dingolfing, Germany, factory that cranked out 332,700 units.

BMW will begin production of the X4 sports activity coupe this year, joining the X3, X5 and X6 models at the Greer plant.

Wilson said the plant expects production to go up this year with the launch of the X4 and anticipates “continued strength in our other X models, particularly the X3 and X5.”

Vitner said the Greer plant “has greatly exceeded expectations since it arrived in South Carolina. The plant has been continuously expanded and has helped the state land a whole host of suppliers and likely paved the way for other industries to expand in the state.

“I personally believe that the success that BMW has had in South Carolina is one of the reasons Boeing chose to expand in Charleston.”

Vitner said he doesn’t think the Upstate is too reliant on BMW and the automotive sector that includes Michelin and dozens of parts suppliers.

“We are fortunate in that BMW exports a large proportion of their output and that they produce a product that consistently sells at a premium. This helps insulate the region’s economy from what is otherwise a notoriously cyclical business,” he said.

“BMW is not immune from the auto cycle but, with much of their product headed overseas, their Upstate operations are better able to withstand swings in the U.S. business cycle.”

Wilson said BMW Manufacturing’s exports for 2013 totaled 210,760 vehicles, just more than 70 percent of production.

“That’s consistent with the past few years,” he said.

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