BMW to Spend $1 Billion on New Factory in Mexico

Bayerische Motoren Werke (BMW) announced today that it is looking to invest about $1 billion in a new factory in Mexico.

The German automaker discussed plans to build the plant in San Luis Potosi, with an aim to reduce its dependence on more expensive plants at home, according to Reuters. The company said the factory would start assembling cars in 2019, in hopes of eventually producing 150,000 vehicles each year.

"Mexico is an ideal location for the BMW Group," said Harold Krueger, production chief for BMW. "We are continuing our strategy of 'production follows the market.'"

The plant, which will employ close to 1,500 people, will be the second factory that BMW has opened in North America, Bloomberg reported. The company is one of the latest to announce plans to build a factory in Mexico, with Mercedes-Benz announcing plans last week to build cars with Nissan in Aguascalientes in 2017. Audi is also looking to build cars in San Jose Chiapa in 2016.

Mexico is being viewed as a big spot for plants as BMW, Mercedes and Audi aim to expand globally, Reuters reported.

"The premium brands are finally realizing that Mexico has the capacity to build signature vehicles, said Guido Vildozo, analyst for HIS Automotive.

"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."

The kinds of vehicles that will be produced in the factory have not yet been revealed, and a BMW spokeswoman said the company has not made a decision on the model types. However, officials from Mexico and Europe said they believe 3Series cars could be produced at the factory.

News of BMW's Mexico factory follows the company's announcement that it will invest $1 billion to produce more vehicles - 50 percent more, specifically, at its plant in Spartanburg, South Carolina, Bloomberg reported. The factory will be able to produce up to 450,000 cars by 2016.

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Bmw, Mexico
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