Mexico appears to be the next automotive hot spot, with most major manufacturers already having or planning production bases in the North American country. Following Daimler’s and Renault-Nissan’s joint production announcement last week, rival BMW is on the verge of unveiling manufacturing plans for Mexico.
A Reuters report said the German luxury car manufacturer is expected to unveil plans this week to build a new factory in Mexico, as the company wants to meet growing demand for premium cars. A government official speaking on condition of anonymity said that the investment is likely to amount to at least €1 billion ($1.36 billion), with the plant to be located either in Hidalgo state north of Mexico City or San Luis Potosi in central Mexico.
On Monday, BMW said a decision will be made public on July 3 and declined to comment further. In addition to the new plant in Mexico, BMW also plans to invest $1 billion to expand capacity by 50 percent at its U.S. plant in Spartanburg, South Carolina.
According to supplier sources, BMW has already planned a production timetable for Mexico, with assembly scheduled to start in late 2017, with an annual production capacity of up to 200,000 by 2020.
By manufacturing in Mexico, European carmakers can sell their vehicles in the United States while avoiding some of the currency and tariff costs that affect profits on imports. Furthermore, Mexico offers lower labor costs than Germany and the United States.
By Dan Mihalascu
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