BMW to decide in next months over second site in North America

Article by Christian Andrei, on April 10, 2014

BMW is making progress with plans to build a second site in North America to meet growing demand for its offerings in the region. Harald Krueger, BMW's production chief, said in an interview in an internal publication, as obtained by Bloomberg News, remarked that they will decide on the matter in the next months, adding that there is still potential in North America.

People privy with the matter told Bloomberg News that the German luxury carmaker has been narrowing the location candidates, which includes at least two sites in Mexico. One of the sources said that BMW is mulling producing its 3 series at the new site.

BMW chief executive Norbert Reithofer remarked in March that the carmaker will need an additional site in North America "at some point" as part of an expansion to repel challenges by Audi and Mercedes-Benz. BMW recently disclosed plans to invest $1 billion to expand its Spartanburg site in South Carolina to become its largest facility globally.

BMW spokesman Mathias Schmidt told Bloomberg News by phone that as part of the carmaker’s long-term growth strategy, they are looking at different countries for possible locations for future production facilities. He noted that they have yet to decide for a new site in North America.

BMW plans to expand production capacity at Spartanburg by 50 percentby 2016 to 450,000 vehicles while adding output of the X7 large SUV. BMW’s largest production facility is currently located in Dingolfing near Munich, where it builds the 3-, 5-, 6- and 7-series models. BMW produced 342,000 cars in Dingolfing in 2013.

BMW, Audi and Mercedes are all adding output capacity as production continues to fall behind demand. Mercedes recently announced plans to invest EUR1 billion ($1.4 billion) to double capacity at its Beijing site. Mercedes builds SUVs at its Tuscaloosa site in Alabama, where it is adding production of the C-class sedan in June.

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