[Jason]

BIMMERPOST NEWS

Official: BMW to Build Plant in Mexico With One Billion Dollar Investment

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Investment of roughly one billion US dollars
Mexican state of San Luis Potosí chosen as location
Capacity of around 150,000 units per year
Start of production planned for 2019
Krüger: Decision underscores commitment to the NAFTA region

Munich/Mexico City. The BMW Group will build a new plant in Mexico in close proximity to the city of San Luis Potosí in the state of the same name. This move is in line with the company’s clear strategic policy of ensuring globally-balanced growth.

"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.

Over the medium term, several thousand jobs will be created on the plant site and in the surrounding area. The company will announce which BMW models will be built at the San Luis Potosí location at a later date.

"This decision underscores our commitment to the NAFTA region. We have been building BMW cars at our US plant in Spartanburg for the past 20 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 company made the announcement at the "Los Pinos" Official Residence of the President in Mexico City today. 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.

Mexico as a competitive manufacturing location within the NAFTA region

The large number of international free trade agreements – within the NAFTA area, with the European Union and the MERCOSUR member states, for example – was a decisive factor in the choice of location. Other crucial advantages were the highly-qualified local workforce, a solid network of established suppliers and the well-developed infrastructure. The BMW Group has maintained good relations with Mexican suppliers for many years and purchased products worth 1.6 billion US dollars locally last year.

The BMW Group has operated a local sales company in Mexico since 1994 and sold a total of 13,992 vehicles in the country in 2013. This represents an increase of almost 18.3% over the previous year. Motorcycle sales for the same period reached 2,064 units (+16.6%).

BMW Group investment in the NAFTA area

The BMW Group already announced a further investment of one billion US dollars at its existing plant in Spartanburg, USA back in March of this year. This will increase that plant’s annual production capacity to up to 450,000 vehicles by the end of 2016 and make Spartanburg the largest plant in the BMW Group’s international production network.

A further 200 million US dollars will be invested to expand the joint venture carbon fiber plant in Moses Lake, Washington. This will triple local production capacity over the long term, making the Moses Lake plant the world’s largest carbon fiber manufacturing facility.

The BMW Group will invest a total of 2.2 billion US dollars in the NAFTA region in the period up to 2019.

In parallel, the BMW Group is currently building a plant in the state of Santa Catarina in Brazil. The start of production for the Brazilian plant is scheduled for later this year.

With plants in the US, Mexico and Brazil, the BMW Group will have extensive production capacity at key locations in North and South America.


Harald Krüger, member of the BMW AG Board of Management, responsible for Production, together with Mexican President Enrique Peña Nieto at the announcement of the plant in Mexico.


Earlier info:

via Reuters

CITY/MUNICH, June 30 (Reuters) - Germany's BMW AG will unveil this week plans to build a new factory in Mexico, a government official said, as the company seeks to meet growing demand for premium cars.

News of the factory comes just days after BMW's German rival, Daimler, announced similar plans, and adds to a growing list of companies plowing money into car making in Mexico.

Speaking on condition of anonymity, the Mexican official said the plant would likely amount to an investment of at least 1 billion euros ($1.36 billion) and would be located either in Hidalgo state north of Mexico City or San Luis Potosi in central Mexico.

A spokesman for Munich-based BMW said earlier on Monday that "a decision will be made public" on July 3.

BMW declined to comment further.

A new factory in Mexico would come on top of BMW's plans to invest $1 billion to expand capacity by 50 percent at its plant in Spartanburg, South Carolina.

BMW Chief Executive Norbert Reithofer said last week that the Bavarian carmaker was still deliberating about where to locate a new factory and would reach a decision before the summer break.

Premium auto makers BMW, Audi and Mercedes-Benz are expanding global production as their factories in Germany struggle to meet strong demand for off-road vehicles and limousines in the United States and Asia.

Supplier sources said BMW had already mapped out a production timetable for Mexico, with a tentative plan to begin assembly in late 2017, ramping up annual capacity to 200,000 by 2020.

On Friday, Daimler AG and Renault Nissan said they would invest 1 billion euros ($1.36 billion) to develop small cars and build a factory in Aguascalientes, Mexico.

Manufacturing in Mexico allows European car makers to sell vehicles in the United States while avoiding some of the currency and tariff costs that crimp profits on imports. Mexico also offers lower labor costs than Germany and the United States.

Daimler's Mercedes-Benz, Nissan Motor Co, Honda Motor Co , Mazda Motor Corp and Volkswagen AG already have large auto plants in Mexico.

At around $2.50 an hour, manufacturing wages in the country are nearly 20 percent cheaper than in China, according to a Bank of America study. That study put U.S. manufacturing wages at just under $20 an hour, on average.

German car makers' overall output is set to rise for the fifth year in 2014, driven by overseas production, German auto industry association VDA has said. ($1 = 0.7345 euros) (Reporting by Luis Rojas in Mexico City and Irene Preisinger in Munich; additional reporting by Edward Taylor; and Dave Graham. Editing by Tom Pfeiffer and Andre Grenon)

[GOLFFRR]

very interesting.

avg US is 20$ and hour and there 2.50$ dang thats a huge difference

[Doctor///M]

#becausefutbol

[InTheNightKitchen]

Let the ignorance ensue

[Roki_014]

so does this mean , lowering prices as well?

[nick3753]

Originally Posted by Roki_014

so does this mean , lowering prices as well?

No. Just larger profits. That's the BMW way now. ///Mexican.

[Japi]

BMW: made in Mexico. If the quality same and prices lower, its fine but if the prices same and quality bad, nou thanks.

[MaximumG]

BMW has already been making BMWs in Mexico for the past 20 years. Right now they still haven't revealed a lot of detail about the new Mexico plant. It doesn't necessarily mean US-bound Mexican-assembled BMWs just yet.

[mti]

Originally Posted by Japi

BMW: made in Mexico. If the quality same and prices lower, its fine but if the prices same and quality bad, nou thanks.

So if the quality is the same and the price is the same.... whats the difference for you personally if it's made in the US, Germany, Mexico, Brazil?

[Dackelone]

Just because it's made in Mexico doesn't mean poor quality. Actually VW's have been made in Mexico for a long, long time. Mexican made Golf's score higher quality than German made Golf's. I think this is good news. Who's to say that this Mexican/BMW plant will produce cars. It might just make engines or transmissions for SC plant. ?

[BMW M Power Mexico]

I am glad that - so far - this thread hasn't devolved into irrational complaints like the last time this topic was brought up here at Bimmerpost.

I'd like to chime in. I am a Mexican "chilango", proud to be one, with lots of american friends and of course very happy about this news.

Unfortunately Mexico's image in the US is very bad because of the drug trade, illegal immigration and corruption.

Without denying any of the above problems, I can say that there are millions of mexicans like me (the majority of mexicans) who work hard every day and try to make Mexico a better place. Our country is much more than the above problems (and fútbol yey!)

A BMW plant in Mexico is good news for the US as well, not just Mexico because of these reasons:

1. The real alternatives and competitors are other - relatively low cost locations - in Asia, Eastern Europe and Africa. Not the very successful, recently expanded, US operation in NC.
2. Mexican automotive labour is very qualified, we have had a booming auto industry for the last 15 years or so.
3. US suppliers are much more likely to be integrated into this plant's value chain than they would be if the plant was built outside North America.
4. Creating well paid jobs in Mexico reduces illegal immigration to the US in the long term.
5. A wealthier neighbour to the south helps the US in many ways. We can better police ourselves and buy more US made products. We are also politically stable and a partner instead of trouble.

It is also good news for BMW enthusiasts because the cars will be exactly the same. They will still be built and designed in Germany, to German standards and philosophy. And Mexican labour is as qualified as any other in the world. Harder working than most, even.

I am pretty sure BMW's won't get any cheaper because of this - just as a 3 series built today in South Africa isn't any cheaper than one built in Munich. But this enables BMW to make money in an ever tougher competitive environment with their peers and thus, STAY INDEPENDENT.

[W///]

Originally Posted by InTheNightKitchen

Let the ignorance ensue

+1

How many people here know that portion of 3er sedans in the US are made in South Africa?

[flzrider]

Did anyone else read this as "BMW plans to build a plant in New Meixco"?

[Reedomn]

Originally Posted by flzrider

Did anyone else read this as "BMW plans to build a plant in New Meixco"?

me..LOL

[jc05e46m3]

Originally Posted by BMW M Power Mexico

I am glad that - so far - this thread hasn't devolved into irrational complaints like the last time this topic was brought up here at Bimmerpost.

I'd like to chime in. I am a Mexican "chilango", proud to be one, with lots of american friends and of course very happy about this news.

Unfortunately Mexico's image in the US is very bad because of the drug trade, illegal immigration and corruption.

Without denying any of the above problems, I can say that there are millions of mexicans like me (the majority of mexicans) who work hard every day and try to make Mexico a better place. Our country is much more than the above problems (and fútbol yey!)

A BMW plant in Mexico is good news for the US as well, not just Mexico because of these reasons:

1. The real alternatives and competitors are other - relatively low cost locations - in Asia, Eastern Europe and Africa. Not the very successful, recently expanded, US operation in NC.
2. Mexican automotive labour is very qualified, we have had a booming auto industry for the last 15 years or so.
3. US suppliers are much more likely to be integrated into this plant's value chain than they would be if the plant was built outside North America.
4. Creating well paid jobs in Mexico reduces illegal immigration to the US in the long term.
5. A wealthier neighbour to the south helps the US in many ways. We can better police ourselves and buy more US made products. We are also politically stable and a partner instead of trouble.

It is also good news for BMW enthusiasts because the cars will be exactly the same. They will still be built and designed in Germany, to German standards and philosophy. And Mexican labour is as qualified as any other in the world. Harder working than most, even.

I am pretty sure BMW's won't get any cheaper because of this - just as a 3 series built today in South Africa isn't any cheaper than one built in Munich. But this enables BMW to make money in an ever tougher competitive environment with their peers and thus, STAY INDEPENDENT.

This is so well written. Great points. I think it's so ignorant for some people to assume that since they would be made in Mexico, the quality would suffer. I would beg to differ. As stated above, there are many reasons why the US would benefit. Not only that, there is a VAST majority of the hispanic population that, when given the opportunity to hold a steady job, will perform above and beyond the call of duty. Most times, the $2.50/hr type workers will outperform the $20/hr workers simply because most of them take sheer pride in what they do. End rant.

Originally Posted by W///

+1

How many people here know that portion of 3er sedans in the US are made in South Africa?

I didn't know that! Learn something everyday.

[Jmpascual]

Originally Posted by W///

+1

How many people here know that portion of 3er sedans in the US are made in South Africa?

I think most of us on this app know that BMW has a plant in South Africa for the 3 series. BMW owners who really don't bother to find out more about their car might assume their car was made in Germany or elsewhere in Europe. Checking the VIN number, you can find where yours was built. Mine was built in Regensburg.

[Red Lined]

Instead of European Delivery, would I be able to take a Mexican Delivery?

[matbl]

Hmmm... Picture on the front page for this thread looks a lot lile the Tesla plant...

[Jmpascual]

Originally Posted by jc05e46m3

This is so well written. Great points. I think it's so ignorant for some people to assume that since they would be made in Mexico, the quality would suffer. I would beg to differ. As stated above, there are many reasons why the US would benefit. Not only that, there is a VAST majority of the hispanic population that, when given the opportunity to hold a steady job, will perform above and beyond the call of duty. Most times, the $2.50/hr type workers will outperform the $20/hr workers simply because most of them take sheer pride in what they do. End rant.

I didn't know that! Learn something everyday.

Mexican Coke (Coca Cola) is better.

[qbix]

Why don't they move the whole business over there?
BMWs quality produced outside Germany is worse. No offense but that's the fact.
If I want a Mexican quality car for sure it is not going to be BMW.

Just as a matter of fact in china second hand Mercedes imported from Germany was more expensive than the brand new produced in China.

[nick3753]

I would be more worried about getting a car from a brand new plant with all brand new employees than the fact that this plant is located in Mexico.

[DM1]

This is excellent news and as a Mexican I feel proud of the way our county is managing the opportunity to create jobs and help to improve the life quality of our citizens. As a BWM fan I will be paying a lot of attention in case there are any good opportunities to get into the BMW world as I'd love to work there, for joy.

BMW M Power Mexico couldn't have said it better, I agree with you 100%.

A good friend of mine has just been hired by Audi for their new plant in Puebla and he's told me the process and all that and it is exciting. He's getting 3 months of "learning German" only before having to travel to Germany for 1.5 years and then coming back to perform the job he's been hired for. WOW! I'd love to do something similar for BMW.