Earlier this year BMW announced its plans to invest another $1,000,000,000 in its Spartanburg, South Carolina plant to enable it to increase production there by 50 percent. That is not enough North American production for BMW. On Thursday, July 3, they are expected to announce plans to build a new factory in Mexico, according to a government official in a Reuters report.
Speculation on a BMW plant in Mexico has been rampant for over two years.
A BMW spokesman confirmed that the company would make an announcement in Mexico on Thursday. The spokesman declined to say of the announcement was about a decision to build a new plant. A reasonable observer would conclude that a company the size of BMW is probably not going to schedule a press conference in Mexico to announce that they are not building a plant in Mexico, so a reasonable conclusion is that Mexico will get a new BMW factory.
Last week, BMW CEO Norbert Reithofer said the company would decide on a new North American plant before the summer break. Reuters reported last October that parts suppliers to BMW had already seen a production schedule for Mexico with operations beginning in late 2017. A target of 200,000 vehicles produced annually by 2020 was also mentioned.
Since Mexico is a NAFTA signatory, cars built there to be sold in the United States and Canada would avoid some currency and tariff costs. Labor would also be less expensive in Mexico than in the United States or Germany.
We will be waiting on Thursday to see if BMW makes an anti-climactic announcement of a new Mexican plant, or surprises us with something completely different.—Scott Blazey
[Photo courtesy Reuters.]