BMW to spend $1 billion to build new site in San Luis Potosi, Mexico

Article by Christian Andrei, on July 6, 2014

BMW is planning to invest $1 billion to build a site in San Luis Potosi, Mexico that could produce around 150,000 units annually and have a 1,500-strong workforce. Production operations are bound to start in 2019, disclosed Harald Krueger, BMW board member for production.

Krueger said in a statement that the new site, along with BMW’s plant in Spartanburg, South Carolina, underscores the carmaker’s commitment to the North American Free Trade Agreement region. He noted that the Americas are among the most important growth markets for the BMW Group, adding that the carmaker is continuing its strategy of “production follows the market.”

The disclosure comes after rival Daimler and Renault-Nissan announced plans to build a $1.36 billion site in Aguascalientes, Mexico, to produce compact vehicles for their Infiniti and Mercedes-Benz brands.

BMW’s announcement was done at the residence of President Enrique Peña Nieto of Mexico. He was joined by Secretary of Economy Ildefonso Guajardo Villarreal and the governor of San Luis Potosi state, Fernando Toranzo Fernández.

According to BMW, large number of international free trade agreements of Mexico was a decisive factor in the choice of location. BMW also said that it chose Mexico due to the quality of the work force, a supplier network the carmaker has been sourcing parts from, and infrastructure.

Krueger remarked BMW has already reached initial agreement with worker representatives in San Luis Potosi. BMW has over 100 suppliers in Mexico, Krueger said, adding that there will be more supplier opportunities in the future.

Andreas Klugescheid, corporate and government affairs head of communications for BMW's production network, told Automotive News that supply sourcing in Mexico reached $1.61 billion in 2013. [source: BMW]

Topics: bmw, mexico, plant, investment

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