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 Peńa 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 Peńa Nieto at the announcement of the plant in Mexico.
Earlier info:
via
Reuters
Quote:
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)
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