BMW CEO Norbert Reithofer has revealed the automaker's strategy for the next several years in a company document released today. The document included BMW's plan to sell 1.8 million vehicles by 2012, a target that will be aided by the addition of several new models over the next five years — including a BMW X1 crossover, BMW Gran Turismo that will be based on the CS show car, a Mini SUV and a new Rolls-Royce coupe.

In addition to a new Rolls-Royce coupe, the automaker will also introduce a vehicle slotted below the Phantom.

BMW is also working on a new concept car called the Progressive Activity Sedan. The concept will focus on efficient packaging and high levels of functionality. BMW will also continue to develop green technologies for use throughout the automakers lineup.

The document also stated that BMW will better monitor currency fluctuation and will increase production in areas that have a favorable exchange rate. The document outlined increasing production at BMW's Spartanburg, South Carolina plant to 240,000 vehicles annually by 2012 — a 100,000 unit increase over current capacity — as well as increasing its Mini plant in Oxford to to 260,000 units annually. BMW is also planning to increase Chinese production from from 30,000 units to 44,000.

Reithofer did not confirm that BMW would add a fourth brand but said that it was still under consideration.

The latest news out of Germany about BMW considering adding a fourth brand to compliment its BMW, MINI, and Rolls-Royce line-up raises an interesting question. How do you add to one of the most successful auto companies in the world and get it right? It's not as simple as it sounds.

BMW has grown and become successful because its three brands not only know their customer base, they are also disciplined about staying with their business plan. Take Mini. After it's initial popularity, there was the question a few years ago about how to grow MINI. Should they dramatically enlarge or alter the look of the MINI? Wisely, they have been careful to expand the MINI line-up without changing the look so people scratch their head and say, "What the heck are they doing?"

So now, BMW is considering whether to add a fourth brand. Should it create one? Should it buy one? And what segment of buyers should it target?

My gut says BMW should create a fourth brand since that would allow the company to focus the brand on the exact audience it wants to hit, while not having to deal with the baggage or issues that come with buying an existing brand. This would also let BMW to start it's fourth line small, and carefully build it.

The luxury carmaker BMW has announced it will invest $750m (£373m) as part of plans to increase production in the US.

The investment at the Spartanburg plant, South Carolina, is aimed at increasing capacity from 160,000 to 240,000 units by 2012.

The move is set to create 500 new jobs and comes after the firm recently said it would cut 7.5% of its German workforce in 2008.

The firm is facing both rising costs in Europe as well as slowing US demand.

Since last September, the dollar has tumbled against the euro, hurting firms that pay their costs in euros but receive payment in dollars.

The euro touched an all-time high of $1.546 last week after punching through the $1.50 level at the end of February.

BMW is not the only European firm affected by the swings in exchange rates.

In December last year, the head of the European aerospace and defence company EADS, Louis Gallois, gave a strong indication that if the situation persisted, some of the manufacturing of the Airbus passenger jet would have to be moved outside Europe.

Changing gear

"The boost in production capacity will positively impact the logistics, suppliers, and distribution networks that support the manufacturing process," said Josef Kerscher, president of BMW Manufacturing.

The firm said the plant would produce the BMW X3, X5 and X6 models for international markets.

Analysts say that by building more vehicles in its South Carolina plants, Munich-based BMW can pay less wages in euros and will also save money by sourcing locally for parts used by its US factories.

This shift in production has resulted in planned cuts of 8,100 positions in Germany.

"This is completely driven by the plunge in the dollar," said Oliver Wyman, publisher of the Harbour Report on automotive manufacturing activity.

"Conceivably, as the volume increases and the manufacturing system at the Spartanburg, South Carolina, plant improves, costs may come down enough to cut prices of their cars."

The world’s largest maker of luxury cars, BMW, is taking steps to reduce its industry-topping 60 percent of U.S. vehicle leases versus purchases. The automaker is evidently taking cues from the huge losses domestic automakers have been taking as a result of off-lease vehicles being valued at less than expected, although this was due mainly to them being gas-guzzling trucks and SUVs.

At the start of May, BMW raised lease price by an average of three percent and more recently introduced 0.9 percent financing on new car loans for as long as five years.

“We are offering a broader variety of purchasing options,”‘ BMW U.S.A. spokesperson Jan Ehlen said in a Bloomberg report on Wednesday, adding the automaker is trying to achieve a greater balance between financing and leasing.

BMW cited costs of $373 million in the first quarter as a direct result of the lower values of vehicles at the end of their leases.

FRANKFURT (AFP) - The German luxury car maker BMW joined rival Daimler on Friday in warning it would miss its 2008 targets, a sign that high-end manufacturers have been caught by the international financial crisis.
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BMW said it could not give a full-year outlook after its first-half pre-tax profit fell by 35 percent in the first six months of the year to 1.24 billion euros (1.93 billion dollars).

Net profit fell by 26 percent to 994 million euros.

Chairman Norbert Reithofer provided no precisions during a telephone news conference early in the day.

Last week, Daimler and its Mercedes brand cut its full-year profit forecast to "more than seven billion euros," from a previous outlook slightly above 7.7 billion euros, owing to slumping auto markets.

The companies are still making money but profits have fallen sharply.

"It is already a bad sign," said Ferdinand Dudenhoeffer, a German auto specialist.

"And 2009 is going to be very tough too," he told AFP.

Other European car makers such as Fiat, Peugeot and Volkswagen have fared better with cheaper cars, but high-end German models depend on the US market where financial conditions have taken a serious turn for the worse.

Dudenhoeffer said the other car makers would also feel the pinch "when things become tougher in Europe, Brazil or China."

He expected more profit warnings in the next four or five months.

For BMW, the US market is its biggest, and the German group has extensive leasing operations there as well which were were slammed by the international financial crisis.

In the first half, BMW booked a provision of 695 million euros to cover financial risks, it said.

"The price level of pre-owned cars in the USA -- and hence the level of revenues that can be generated on vehicles returned at the end of leases -- remained under further pressure," the company explained.

A major programme of job cuts cost the company an additional 107 million euros, it added.

Steep rises in oil and raw material prices and the euro's rise in value against the dollar were other factors behind the weaker results, the statement said.

"A number of key external factors have got worse" in the second quarter, BMW financial director Michael Ganal told a telephone press conference.

"History has rarely seen factors like this occur at the same time," he added.

The group plans to reduce the number of cars sold in the United States by around 40,000 from more than 300,000 last year, 40 percent of which were to be re-routed to Europe and China.

"The remaining cars will not be produced," Ganal said, a decision that concerned some 20,000-25,000 units.

BMWs would also realign its US business and increase prices, Reithofer added.

"We will start the respective modifications for the American market this year and will continue in 2009," he said.