AUTOSHOW-UPDATE 1-BMW mulls building 300,000 vehicles in China

* BMW sees China sales of over 100,000 units this year

* Exploring whether to build the X1 in new Shenyang site

* Share down 0.8 pct, in line with sector index .SXAP

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BEIJING, April 22 (Reuters) - German luxury carmaker BMW (BMWG.DE) expects China could overtake the UK as its third largest market this year and forecast Chinese demand could prompt it to build 300,000 vehicles per year there in future.

"From our point of view, it is realistic that we will need this capacity over the long-term," Chief Executive Norbert Reithofer told reporters in Beijing on Thursday ahead of the city's auto show that begins this week. [ID:nSGE63K0EL]

Ian Robertson, the group head of sales, said BMW planned to sell over 100,000 units this year versus a volume of 90,536 in 2009.

"I am pretty confident that China will be the third largest market for BMW this year. There's no other market which has seen equal growth," he said.

Based on BMW's recent performance that showed sales in China doubled to nearly 34,200 vehicles in the first quarter -- a record for the first three months -- the Briton will likely beat his retail goal easily.

The strong growth means the German luxury carmaker will need to ramp up capacity to meet demand.

Currently BMW and its local partner Brilliance (1114.HK) are splitting 50-50 an investment of 560 million euros ($753 million) to build a second plant in Shenyang that would enable a combined annual production of 100,000 vehicles starting in 2012.

Potentially that capacity level could eventually be tripled, according to BMW.

Last year BMW built roughly 43,700 units of the 3-Series and 5-Series models in Shenyang with Brilliance, an increase of 24 percent.

BMW said it is exploring whether to build the X1 compact sport utility vehicle in the new plant.

"We are examining this option," Reithofer said.

(Reporting by Irene Preisinger)