BMW to Enter Sport-Utility Market

BMW, best known for its sporty luxury cars, said Tuesday that it will respond to the growing U.S. appetite for sport-utility vehicles by producing its own version at its factory in Spartanburg, S.C.

Germany’s third-biggest car maker said it will hire 1,000 more workers for and invest an additional $400 million in the nonunion factory, where it already makes its two-seat Z3 roadster. The move signals BMW’s intent to boost production outside Germany, where labor costs are among the highest in the world.

BMW plans to begin the sport-utility vehicle project next year at the South Carolina plant, which now employs 2,000 people and makes about 50,000 of the Z3s a year.

The company last year made half its 1.19 million cars outside Germany, mostly at its Rover factories in Britain and at its U.S. plant.

BMW Chief Executive Bernd Pischetsrieder also said at the auto maker’s annual shareholders meeting that BMW will not try to outbid Volkswagen to acquire Rolls-Royce Motor Cars from Vickers.

Vickers said last week that it would advise shareholders to accept Volkswagen’s $701-million bid for Rolls, setting aside its earlier agreement to accept BMW’s $554-million bid.