BMW to Spend $1 Billion on Expanding South Carolina Factory

BMW said Friday that it will be investing $1 billion on production at its plant in Spartanburg, S.C. over the next two years.

The money will be spent on production of two of BMW's X-series vehicles, according to Associated Press. The decision was announced as the Munich-based company celebrates its 20^th Anniversary.

BMW said the expansion will bring in 800 jobs to Spartanburg and that the capacity of the plant would grow by 50 percent. The company added that the decision to increase production represented the U.S. market's significance. BMW sold 377,000 vehicles in the U.S. in 2013, which is 19 percent of the company's total, The New York Times reported.

"At the BMW Group, we have a golden rule: Production follows the market," said Norbert Reithofer, chief executive of BMW.

The two vehicles that the automaker will produce are the X7, a bigger SUV, and the X4, a sportier version of the X3 coupe, Associated Press reported. BMW will also develop a plug-in hybrid version of its X5 SUV. 8,800 people will be working at the plant as a result of the additional jobs. 450,000 vehicles will be made each year by 2016, which will make the plant the biggest of BMW's 28 plants around the world.

"We love Germany. Bout South Carolina is now the BMW capital of the world," South Carolina Gov. Nikki Haley said at a ceremony in celebration of the company's decision.

The two new vehicles will add to the list of vehicles that the Spartanburg plant current produces, which include the X3, X5, X6 and the new X4 crossovers, Forbes reported.

"The BMW Group strives for a good balance of growth among all markets and continents," said Harald Kruger, production chief of BMW. "The Spartanburg plant is an important building block in our international network of 28 production and assembly facilities in 13 countries today and makes a vital contribution to profitable, globally balanced growth."

BMW officials said they were able to achieve this feat because of the talent and effort of their employees, Associated Press reported. Reithofer managed the Spartanburg plant from 1997 to 2000, and calls the area his home away from home.

"We have learned to appreciate America and its people," Reithofer said. "Twenty years after opening this plant, I am proud to say we at the BMW Group are proud to say we are a real part of America."