Late last week, BMW officially announced that they will be investing $1 billion to build a new factory in the heart of Mexico.
Harald Krueger, a member of the BMW AG Board of Management, said, “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.”
This, of course, is the third major investment that BMW has made in North America.
In March of just this year, BMW announced that they would be investing $1 billion to a factory located in Spartanburg, South Carolina. BMW has also invested $200 million in a carbon factory located in Moses Lake, Washington.
These investments are all part of a strategy to take advantage of current NAFTA regulations.
Krueger says, “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.”
“The Americas are among the most important growth markets for the BMW Group. We are continuing our strategy of ‘production follows the market.’”
Currently, the United States is the world’s largest luxury car market. BMW’s increased attention to this market is not surprising.
All of this is only amplified by America’s recent resurgence in automotive sales, a fact that has certainly benefited Mexico. This BMW move is the third major auto manufacturer development in just the past month for Mexico (Kia and Nissan also announced that they are opening up plants).
IHS Automotive analyst, Guido Vildozo, says, “The premium brands are finally realizing that Mexico has the capacity to build signature vehicles.”
“We are going to see all these plants starting with one or two products at the very beginning, but they will gradually become critical pillars of profitability for the premium manufacturers.”