BMW mulls building a new assembly site in Mexico

Article by Anita Panait, on August 19, 2013

BMW is considering expanding manufacturing footprint in North America by building a new assembly site in Mexico. According to Ludwig Willisch, chief executive of BMW of North America, the carmaker is holding preliminary talks with "local governments" in Mexico on the possibility of constructing a factory in their districts.

Willisch told Automotive News that before BMW decides to build vehicles in Mexico, other developments need to occur first, the top priority of which is a free-trade agreement between the United States and Europe. A free trade between the US and Europe would provide BMW with the flexibility and cost structure to expand its North American manufacturing base. W

illisch remarked that BMW won't commit to another site in North America plant until a free-trade agreement is in place, which usually takes a long time to be signed. He added once a free-trade agreement is in place, there would be more substantive talks between BMW and Mexican authorities.

Willisch said that a Mexican site could start producing new BMWs within 10 years from now. The carmaker is getting ready its new $261-million Santa Catarina site in Brazil for launch next year. BMW’s Spartanburg site in South Carolina took just 23 months from groundbreaking to launch output of its first 318i, making it the fastest factory startup in automotive history.

Thanks to Mexico’s advantageous trade agreements with other North and South American countries, low wage, and manufacturing costs, as well as an increasingly skilled workforce and strong supplier base, global carmakers have been increasing their investment in the country.

For instance, Audi is building a site in Mexico while Daimler is assessing whether to produce Mercedes-Benz cars in the country. Japanese carmakers Honda Motor Co. and Mazda Motor Corp. are also currently constructing sites in Mexico. [source: automotive news - sub. required]

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