BMW is considering adding a fourth model to its Spartanburg, South Carolina factory in order to further compete with U.S. luxury market leaders Lexus and Mercedes-Benz.

The Bavarian firm's chief, Frank-Peter Arndt believes an additional "volume model" could be added to Spartanburg's production line. The introduction of a fourth model would help reduce BMW's exposure to foreign currency, which presently tops US$14 billion. IHS Automotive analyst Rebecca Lindland believes the 3-Series is the most likely candidate for production at Spartanburg: "The 3-Series is a no-brainer." she said.

Of the 1.07 million vehicles BMW delivered last year, 397,103 of them were 3-series models. In spite of a 9.2% rise in U.S. sales from January to September 2010, BMW is still trailing behind Mercedes-Benz and Lexus.

The Spartanburg factory - which makes BMW's X5 and X6 SUVs - recently underwent a US$750 million renovation to squeeze in the compact X3. The introduction of the latter model meant an increase in BMW's U.S. production capacity by a whopping 50%. Roughly 70% of the vehicles built in Spartanburg are exported, with more than 65% of the component parts sourced from North American suppliers.

Giving further credence to the 3-series at Spartanburg rumor is the December 2009 announcement by rival Mercedes-Benz that it would begin building the C-Class at its Alabama factory. It only figures that BMW would want to face this threat head on.

By Tristan Hankins

Source: Bloomberg

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