BMW is near to making a decision to build a plant in Mexico. It was 20 years ago that BMW announced plans to construct its first assembly plant in North America, particularly in Spartanburg, S.C. According to certain sources, BMW is looking at four locations in Mexico where it will produce the 3-series sedan. BMW is currently in talks with local governments for incentives or tax breaks. A decision is expected in 2013. One insider said that production will start in late 2016 or early 2017. The foremost contender is the state of Queretaro in north central Mexico. BMW is also looking to shift production of its new front-wheel-drive vehicles to Mexico. In addition, BMW is thinking about producing its new front-wheel-drive vehicles in Mexico.
The fwd architecture will be first used by BMW on its next-generation 1 series in 2017, which is when the compact range is set to shift to fwd. An insider said that the annual capacity at the Mexican plant would later reach 100,000 to 150,000 vehicles. BMW plans for the factory to slowly increase production from being at about 40,000 or 50,000 vehicles at first. These levels are similar to how BMW’s Spartanburg facility started.
The plant started rolling out in 1994. BMW is hoping to have its production in Mexico because of its trade agreements with North America, South America and several countries in Asia. Trade is duty-free among Mexico, Europe and the Mercosur countries of Brazil, Argentina, Uruguay and Paraguay. BMW had considered several sites in the U.S. but they’re presently not in the running anymore. BMW benefits from transferring its 3-series production from Germany to Mexico by reducing the impact of currency fluctuations by being able to avoid expansion in the euro zone, which is facing economic troubles. This would also allow BMW to have more competitive pricing for its 3-series sedan compared to its most serious rival, the Mercedes-Benz C class. Production of Mercedes’ C-class sedan at its Vance, Ala. plant will begin in 2014. [source: Automotive News - sub. required]