Rumor: BMW thinking about constructing plants in Mexico and eastern Europe

Article by Christian Andrei, on May 21, 2012

A source inside BMW told Reuters that Mexico is one of the places being considered for its new production plant. In a previous article by German business daily Handelsblatt that cited several sources, BMW is thinking about constructing plants in Mexico and eastern Europe while also studying a plan to boost its Brazil production.

The newspaper said that BMW is expected to decide in the third quarter. According to a BMW spokesman, there are no plans to build another factory in eastern Europe. The spokesman told Automotive News Europe that the company is in talks about opening a plant in Brazil and it won’t comment on other likely locations.

In a previous report, BMW expressed interest in constructing a plant in Brazil but it has warned that it may throw out this plan if it would only fail to profit due to the new government policies in this country.

Last January, the government levied a 30% hike in its industrial products tax on vehicles with lower than 65% of their parts made in the country, as part of efforts to protect jobs and automakers that operate plants in Brazil. Just like its peers, BMW expects that the sales volume in overseas markets outside Europe will grow faster.

The eurozone debt crisis had shrunk the auto market in the continent. BMW, which posted group sales of 1.67 million vehicles in 2011, is looking for ways to increase the annual demand for its premium cars and SUVs to 2 million by 2016. Audi, Volkswagen's premium brand and a rival to BMW, announced plans last April to construct a plant in Mexico. Audi revealed that the advantages in selecting Mexico include low labor costs and being exempted from import duties in several regions.

Topics: bmw, mexico, plant

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