UPDATE 1-BMW to raise China capacity by a third to 400,000 cars

Wed Jul 16, 2014 6:33am EDT

* BMW to double range of China-made cars to six -CFO

* Steps designed "to meet needs" of Chinese buyers -CFO

* China expansion helps diversify sales away from Europe (Adds detail on new Chinese models and background)

BERLIN, July 16 (Reuters) - BMW said on Wednesday it will raise capacity at its two Chinese plants by a third to 400,000 cars over the next two years, increasing its presence in the world's largest auto market.

Less than a month after extending its joint venture with Brilliance China Automotive Holdings until 2028, BMW said it would double the range of locally-made cars to six.

"We are strengthening our focus on meeting the needs and aspirations of our Chinese customers," Finance Chief Friedrich Eichiner said in remarks prepared for delivery in Beijing.

The Munich-based manufacturer will add a new entry model below the 3-series, a "high-functionality car" designed for Chinese families and a variant of the X3 offroader, he said.

BMW, which has been working with Brilliance since 2003, currently builds the X1 offroader as well as long-wheelbase versions of its 3-series and 5-series cars at the plants in Dadong and Tiexi.

The German firm is expanding its China operations because it wants to cut its dependency on the sluggish European market, which last year accounted for 44 percent of group sales.

Sales of the BMW group in China, including the Mini and Rolls-Royce brands, surged by almost a quarter in the first six months to 225,000 cars, compared with a 20-percent gain in 2013 to 392,000. (Reporting by Andreas Cremer; Editing by Maria Sheahan and William Hardy)

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