BMW Group may build Minis at a new site in Mexico

Article by Andrew Christian, on May 20, 2014

BMW Group may decide to build Minis at a site in Mexico, alongside BMW 3-series and 1-series cars, according to Handelsblatt. BMW chief executive Norbert Reithofer has remarked that the carmaker will require a new site in North America to be able to cater to increasing demand for its vehicles.

So far, however, BMW has yet to announce whether the site would be located in Mexico or in the United States. The German carmaker has also yet to announce which vehicles it would produce at the new site.

According to the German newspaper, BMW executives prefer Mexico over the US for production of Minis and its smallest BMW brand vehicles since they are lower margin vehicles, so assembling them locally would increase profits.

Handelsblatt, citing company sources, has reported that BMW’s supervisory board will decide on the plant in the second half of 2014. A BMW spokesman told Automotive News Europe that the report was "mere speculation."

BMW is aiming to increase its production in North America to save costs linked to importing smaller yet lower-margin models, which would burden profitability no thanks to a strong euro. BMW is currently expanding the annual capacity at its Spartanburg site in South Carolina by 50 percent to 450,000 vehicles to add production of the X7 large SUV.

A new site in Mexico would increase BMW’s production capacity in North America to 600,000 vehicles, Handelsblatt said. The carmaker is currently producing Minis at its Oxford site in the United Kingdom, but the plant is already using its full capacity of around 260,000 units per year. [source: automotive news - sub. required]

Topics: bmw, mini, mexico, production

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