Rumors about the BMW Group considering a new Mexico plant have been floating for a while now, with new reports from Germany providing more details about the German carmaker’s expansion plans in North America. According to a report from German newspaper Handelsblatt, BMW Group may build Mini vehicles alongside BMW 3-Series and 1-Series models at a new assembly plant in Mexico.
Earlier this year, BMW CEO Norbert Reithofer said the automaker will need an additional production facility in North America to meet increasing demand. However, BMW has not said whether the plant will be built in Mexico or the United States. The company did not say which vehicles it would make at the new factory either.
According to the German newspaper, BMW executives favor Mexico, as they believe it would better suit company plans to build Minis and small BMWs. That’s because wages are lower in Mexico and building lower margin vehicles there would boost profits. An official decision on the plant is expected in the second half of the year, according to unnamed company sources.
However, BMW has dismissed the report, with a spokesman labeling it as “mere speculation.” The German carmaker aims to boost output in North America to save costs associated with importing smaller, lower-margin models under a strong euro. BMW has already announced that it is increasing yearly output at its plant in Spartanburg, North Carolina, by 50 percent to 450,000 vehicles to build the X7 large SUV.
A new plant in Mexico would raise BMW’s North America production capacity to 600,000 vehicles, Handelsblatt wrote.
By Dan Mihalascu
Story References: Handelsblatt via Autonews Europe
PHOTO GALLERY
