BMW AG, late to market with its first sport/utility vehicle, confirmed it plans to build a smaller version of its popular X5 SUV, expected to be called the X3.
Since the new vehicle is expected to be a high-volume product, it will need a new facility, according to Tom Purves, chairman of BMW’s U.S. unit. Lehman Brothers said in a recent report on BMW that it expects the X3 will be built at the automaker’s Spartanburg, SC, plant, and could generate sales of 110,000 or more. The X3, expected to be launched around 2003, could be of similar size to Honda Motor Co. Ltd.’s CR-V compact SUV, Lehman said.
In addition, the automaker is expected to build a larger version of the X5, called the X7. The X5 has been criticized for being too small for the U.S. market. Lehman Brothers said the X7 should arrive no later than 2002, and add about 20,000 units to sales.
BMW has pushed ahead with plans to expand the X Series lineup following its decision earlier this year to sell Land Rover, the premium SUV brand, to Ford Motor Co. In June, BMW announced it will invest $300 million to expand the Spartanburg plant, where the X5 is built.