BMW to Invest $1 Billion to Expand Its South Carolina Factory

FRANKFURT — BMW said on Friday that it would invest $1 billion over the next two years in its factory in Spartanburg, S.C., which will become the German carmaker’s largest production site.

The expansion will add 800 jobs in Spartanburg and increase the plant’s capacity by 50 percent in 2016, BMW said. In addition, the plant will begin to produce a new, large crossover vehicle.

Expansion of the plant had been expected, but BMW did not disclose the scope of its investment until Friday at an event attended by Penny Pritzker, the secretary of commerce for the United States, and Nikki Haley, governor of South Carolina.

BMW, based in Munich, said the decision to expand production in Spartanburg reflected the importance of the United States market, the company’s second-largest after China. BMW sold 377,000 vehicles in the United States last year, or 19 percent of the company’s total.

“At the BMW Group, we have a golden rule: Production follows the market,” Norbert Reithofer, the chief executive of BMW, said in Spartanburg, according to prepared remarks. Mr. Reithofer managed the Spartanburg operations from 1997 to 2000 and has often said that the optimistic American attitude he encountered there shaped his management style.

A finished BMW X3 was driven off the assembly line on Thursday at the Spartanburg plant in South Carolina. Credit Chris Keane/Reuters

The Spartanburg plant already produces BMW’s line of X series crossover vehicles, which combine elements of sedans and S.U.V.s. 

The new crossover model produced there will be called the X7, BMW said. It did not say when production of the X7 would start, but typically it takes about three years to bring such a vehicle from development to the assembly line.

BMW also plans also produce a hybrid version of its smaller X5 crossover in Spartanburg “in the near future,” the company said.

The company’s plans should help American exports, since BMW ships about 70 percent of the vehicles produced in Spartanburg abroad. Germany owes its status as the world’s third-largest exporter, after China and the United States, primarily to the car industry. BMW and its German rivals Mercedes-Benz and Audi dominate the global market for luxury vehicles.

With the investment, the capacity of the Spartanburg plant will rise to 450,000 vehicles and the work force of 8,000 will grow by 10 percent. The figure does not include additional jobs that the investment will generate at suppliers or local businesses.

The event Friday was BMW’s 20th anniversary of producing cars in the United States. BMW said it had built 2.6 million vehicles in Spartanburg since the plant opened in 1994. After the expansion is complete, Spartanburg will have the largest capacity of BMW’s 28 production facilities around the world.

BMW still produces more than half its vehicles at plants in Germany, however.