BMW AG and its Chinese partner Brilliance China Automotive Holdings Ltd. have started production at their second assembly plant at Shenyang, China.  The two have also begun production at an engine plant, also at Shenyang, that will produce 2.0-liter four-cylinder engines. 

“With our second plant in Shenyang, we will increase our capacity in China to 200,000 vehicles. Together with our partner Brilliance we will further invest 500 million euro in China, thus preparing for future growth”, said Norbert Reithofer, chairman of the board of management of BMW.  “With this investment we will increase total capacity of both plants to 300,000 units per year over the medium term.  Due to our flexible production structure we will be able to produce up to 400.000 vehicles depending on market development”, stated Reithofer.

The engine plant has initial capacity to build 200,000 units annually and will allow the partners to supply the assembly operations locally. 

Despite slowing passenger car sales in China, BMW remains optimistic that sales will rebound in the coming months to justify the aggressive expansion.  “We expect sales in China to grow at a double-digit rate once again in 2012 and to achieve record deliveries,” added Reithofer.  "In addition to the start of BMW X1 production in Tiexi, the ramp-up of the long-wheelbase version of the new BMW 3 Series in the second half of the year will generate further momentum for sales."  Last year, BMW sold 233,630 vehicles in China – an increase of 37.7%.

There is also word that BMW is in discussions with Brilliance over a new brand that would be exclusive to China, this according to China Business News.  The report indicated that the new brand would consist of hybrid electric or electric vehicles, although neither company has confirmed the reports.