BMW is looking to cut $4.9 billion in costs by 2012, but as always, it takes money to make money. Automotive News reports that the German automaker is looking at investing $1 billion in Mexican suppliers to lower costs. The move makes perfect sense considering BMW makes vehicles here in North America, and importing parts from Germany means the company has to pay far higher wages and freight charges. Mexico is also proving to be a viable alternative to production in China, where recent labor unrest has brought wages on the upswing.

BMW isn't commenting on its plans for Mexico yet, but Mexican Economy Minister Gerardo Ruiz Mateos says the automaker wants to "increase the production of auto parts here in Mexico." Mateos is reportedly traveling to Germany to discuss moving parts production to Mexico. And while the Euro is currently its weakest in years, moving parts production to Mexico would also help BMW avoid $1 billion in currency risk, which has hurt German automakers in the past.

[Source: Automotive News - Sub. Req.]


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