Confirming a poorly kept secret, BMW today announced that it will build a new plant in Mexico in the vicinity of San Louis Potosí.
“Mexico is an ideal location for the BMW Group and will be another important plant within our production network. We will invest one billion US dollars in the new production site over the next few years. Production is planned to start in 2019 and during that year, the workforce will reach around 1,500 people,” said Harald Krüger, member of the BMW AG Board of Management, responsible for Production.
BMW will announce at a later date which specific models will be built in Mexico.
“This decision underscores our commitment to the NAFTA region. We have been building BMW cars at our U.S. plant in Spartanburg for the past twenty years. With a planned annual capacity of 150,000 units for the new plant in Mexico, the BMW Group will be even better positioned to take advantage of the growth potential in the entire region,” Krüger said. “The Americas are among the most important growth markets for the BMW Group. We are continuing our strategy of ‘production follows the market’,” he continued.
The big announcement was made at the “Los Pinos” Official Residence of the President in Mexico City. The ceremony was attended by Mexican President Enrique Peña Nieto, Mexican Secretary of Economy Ildefonso Guajardo Villarreal, and the Governor of San Luis Potosí, Dr. Fernando Toranzo Fernández.
Since Mexico is a NAFTA signatory, BMW can take advantage of lower tariffs and costs for cars sold in North America, and also can benefit from international free trade agreements, such as with the European Union and MERCOSUR member states. Lower labor costs will help BMW’s bottom line and a well-established network of parts suppliers will help ease the Mexican plant into operation. In fact, BMW purchased over $1,600,000,000 worth of products last year from Mexican suppliers.
In recent months BMW has announced over a billion dollars of expansions and upgrades to some of its North American facilities. The BMW Group’s planned $1,000,000,000 expansion of BMW Plant Spartanburg will increase production capacity there to 450,000 vehicles by the end of 2016 and will make Spartanburg the largest plant in the BMW Group’s international production network. The Joint SGL-BMW carbon fiber plant in Moses Lake, Washington will see a $200,000,000 investment that will triple the number of production lines and make the plant the world’s largest carbon fiber manufacturing facility.
Between Mexico, Moses Lake, and Spartanburg, the BMW Group will pump a total of $2,200,000,000 into the NAFTA area by 2019.
South of the Equator, the BMW Group is building a plant in the state of Santa Catarina in Brazil. That factory will be on line later in 2014. When all the expansions and plants in Brazil, Mexico, and the U.S. are operational, probably a third or more of the BMW Group’s total global production capacity will be in North and South America.—Scott Blazey