MUNICH, Germany (AP) -- BMW's chief executive told shareholders Thursday that maintaining the automaker's presence in the United States was not a knee-jerk reaction to the strong euro, but a long-term strategy.
''To be successful and respected in our industry, a company has to be active in the world's largest car market,'' Norbert Reithofer said at the company's annual general meeting in Munich.
Earlier this year, the automaker announced that it would take advantage of the weak dollar by expanding production at its plant in Spartanburg, South Carolina, with plans to spend US$750 million (euro486 million) on facilities for its X5 sport utility vehicle and the new generation of its X3 SUV, expanding production from its current 160,000 a year to 240,000 cars annually by 2012.
By building the cars in the U.S., BMW also can save money on wages, since its South Carolina workers earn less than German workers.
''We will cooperate with new suppliers based in (North American) countries ... and increase local sourcing in Spartanburg,'' Reithofer said, adding that the company would increase its purchasing volume in North America for its plants in Europe.
Looking forward, he reiterated the company's hopes to set a sales record for its brands -- BMW, Mini and Rolls-Royce.
''The outlook for the business year 2008 remains unchanged -- provided that the financial crisis does not become worse,'' he said. ''If, however, the situation on the car markets, particularly for preowned cars, does not ease over the course of 2008, there is a risk that this could have a negative impact on BMW group's earnings for the year.''
Last month, BMW said that risk provisions related to a drop in used-car prices and fears of possible defaults on leased cars in the U.S. caused it to shave euro236 million (US$364 million) from its first-quarter earnings of euro487 million (US$751 million) compared with euro587 million a year earlier.
Shares of BMW were down 0.80 percent to euro37.41 (US$57.72) in Frankfurt.
