BMW's jointventure with Brilliance is expected to produce 75,000 from next year.[China Daily]

German luxury carmaker BMW Group announced yesterday in Beijing that it planned to increase production capacity in China to further tap the growing luxury vehicle market in the country.

Friedrich Eichiner, a BMW board member, said the group would have a total production capacity of 300,000 cars a year in the long term, without revealing a specific timetable.

At present, BMW's joint venture with Brilliance China has a 41,000-unit plant in the northeastern city of Shenyang.

The factory's capacity will be upped to 75,000 units next year, Eichiner said.

The two parent companies will also spend more than 5 billion yuan to build a new factory in Shenyang with a planned annual production capacity of 100,000 cars by 2016 or 2017, according to BMW executives.

In the first stage, the new facility will have an annual capacity of 25,000 units in 2012.

BMW's aggressive expansion plan comes on the back of robust growth in China sales in the first 10 months of this year.

The group sold a total of almost 72,000 BMW and MINI cars on the Chinese mainland from January to October, up 36.7 percent when compared with the same period last year.

In October alone, the group's sales on the mainland surged 81 percent to an all-time monthly record of 9,558 units.

BMW's major competitors, Audi and Mercedes-Benz, also enjoy strong performance in China.

Audi, the current leader in China's luxury car market, moved nearly 110,000 vehicles on the mainland in the first three quarters of this year, an increase of 20 percent. Mercedes' saw sales increase by 52 percent, to 44,300 units, during the same period.

"The premium car segment will grow faster than the overall vehicle market in China," Stark said, predicting that the premium segment will account for 7 to 8 percent of the total passenger car market in the years to come from less than 5 percent now.

BMW's expansion plan will also include an engine plant in Shenyang, but it has not provided specifics for the project.

The BMW-Brilliance joint venture, formed in 2003, now produces the 3 and 5 Series sedans.

Eichiner said the venture will launch the all-new 5 Series sedans with an extended wheelbase, specially designed for Chinese buyers, at the end of next year,.

Audi and Mercedes too have car plants in China with local partners.