In 1994, BMW opened its first production facility in the United States. The facility in Spartanburg, North Carolina produces BMW’s hot-selling X3, X5 and X6 crossovers. Last year, over 276,065 copies were made and there are plans to boost capacity to 350,000 units. The rest of BMW’s global production is primarily centered in Germany.
With all currency fluctuations and all the financial issues that European governments are experiencing, BMW is looking to add a new North American facility to the mix. According to Automotive News, it is has come up with the same location as Audi before it: Mexico. For their entry-level models, the German manufacturers are turning to North American production for the aforementioned reasons.
Lower wages than the U.S have led Audi, and now BMW, to choose Mexico. In 2014, Mercedes-Benz will begin production of the C-Class in Vance, Alabama. Audi plans to bring its plant online beginning in 2016. For BMW, the Mexican plant would add extra capacity for the 3-Series and next-generation, front-wheel drive 1-Series lineup.
Versus Germany (one the most expensive and skilled labor markets) Mexican production will allow for increased profit margins and duty-free trade among North America, South America, Mexico and Europe.
In the beginning, the plant would make around 40,000 or 50,000 units a year, with the number ramping up to 150,000 as time goes on. Four sites are reportedly being considered, and BMW is negotiating with local governments. Next year, the company will reportedly make a decision on which site to go with. Apparently, a plant in the U.S was on the table but it unfortunately isn’t in the running.
Spartanburg has a good reputation for quality similar to what BMW puts out in Germany. Hopefully the quality of vehicles at the new plant will be up to par with German production. If approved the plant would begin production in late 2015 or early 2017.
