BMW M3 Sedan

After over a year of speculation, BMW is finally officially announcing that it's building a factory in Mexico. The new plant will cost the German automaker roughly $1 billion US and will have a capacity of about 150,000 vehicles a year when complete. However, production won't begin there until 2019.

The new factory is being built near the city of San Luis Potosí, Mexico, with plans to employ about 1,500 people. Unfortunately, BMW is still mum about which models it's producing south of the border. Earlier rumors indicated the possibility of the 3 Series, 1 Series and maybe even Mini models there.

BMW says Mexico's multiple free trade agreements are a major factor in the choice of location of the plant. They make it possible for the automaker to ship models more cheaply to North America, parts of South America and the European Union. "The Americas are among the most important growth markets for the BMW Group. We are continuing our strategy of 'production follows the market,'" said Harald Krueger, the board's head of production, in the company's official announcement.

The Mexican factory comes on the heels of two other major North American investments for BMW. In March, it declared its plan to invest $1 billion by 2016 into the Spartanburg, SC, factory to increase its annual capacity by 150,000 units and to build the X7 SUV. Its Moses Lake, WA, carbon fiber factory is also getting a further $200 million investment. Plus, there's its roughly $260 million facility coming to Brazil, as well. Scroll down to read the full release about the Bavarian automaker's latest American factory.
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BMW Group to build new plant in the NAFTA region; Mexican state of San Luis Potosi chosen as location

Investment of roughly one billion US dollars
Capacity of around 150,000 units per year
Start of production planned for 2019
Harald Krueger: Decision underscores commitment to the NAFTA region


Munich/Mexico City– July 3, 2014... The BMW Group will build a new plant in Mexico in close proximity to the city of San Luis Potosí in the state of the same name. This move is in line with the company's clear strategic policy of ensuring globally-balanced growth.

"Mexico is an ideal location for the BMW Group and will be another important plant within our production network. We will invest one billion US dollars in the new production site over the next few years. Production is planned to start in 2019 and during that year, the workforce will reach around 1,500 people," said Harald Krueger, member of the BMW AG Board of Management, responsible for Production.

Over the medium term, several thousand jobs will be created on the plant site and in the surrounding area. The company will announce which BMW models will be built at the San Luis Potosí location at a later date.

"This decision underscores our commitment to the NAFTA region. We have been building BMW cars at our US plant in Spartanburg for the past 20 years. With a planned annual capacity of 150,000 units for the new plant in Mexico, the BMW Group will be even better positioned to take advantage of the growth potential in the entire region," Krueger said. "The Americas are among the most important growth markets for the BMW Group. We are continuing our strategy of 'production follows the market'," he continued.

The company made the announcement at the "Los Pinos" Official Residence of the President in Mexico City today. The ceremony was attended by Mexican President Enrique Peña Nieto, Mexican Secretary of Economy Ildefonso Guajardo Villarreal and the Governor of San Luis Potosí, Dr. Fernando Toranzo Fernández.

Mexico as a competitive manufacturing location within the NAFTA region
The large number of international free trade agreements – within the NAFTA area, with the European Union and the MERCOSUR member states, for example – was a decisive factor in the choice of location. Other crucial advantages were the highly-qualified local workforce, a solid network of established suppliers and the well-developed infrastructure. The BMW Group has maintained good relations with Mexican suppliers for many years and purchased products worth 1.6 billion US dollars locally last year.

The BMW Group has operated a local sales company in Mexico since 1994 and sold a total of 13,992 vehicles in the country in 2013. This represents an increase of almost 18.3% over the previous year. Motorcycle sales for the same period reached 2,064 units (+16.6%).

BMW Group investment in the NAFTA area
The BMW Group already announced a further investment of one billion US dollars at its existing plant in Spartanburg, USA back in March of this year. This will increase that plant's annual production capacity to up to 450,000 vehicles by the end of 2016 and make Spartanburg the largest plant in the BMW Group's international production network.

A further 200 million US dollars will be invested to expand the joint venture carbon fiber plant in Moses Lake, Washington. This will triple local production capacity over the long term, making the Moses Lake plant the world's largest carbon fiber manufacturing facility.

The BMW Group will invest a total of 2.2 billion US dollars in the NAFTA region in the period up to 2019.

In parallel, the BMW Group is currently building a plant in the state of Santa Catarina in Brazil. The start of production for the Brazilian plant is scheduled for later this year.

With plants in the US, Mexico and Brazil, the BMW Group will have extensive production capacity at key locations in North and South America.

Addendum:
Information on the plant is available immediately at the www.bmwgroup-plant-sanluispotosi.com website. The website also includes contact details and the opportunity to apply for a career with the BMW Group through online registration.

The BMW Group
With its three brands BMW, MINI and Rolls-Royce, the BMW Group is the world's leading premium manufacturer of automobiles and motorcycles and also provides premium financial and mobility services. As a global company, the BMW Group operates 28 production and assembly facilities in 13 countries and has a global sales network in more than 140 countries.

In 2013, the BMW Group sold approximately 1.963 million cars and 115,215 motorcycles worldwide. The profit before tax for the financial year 2013 was € 7.91 billion on revenues amounting to approximately € 76.06 billion. As of 31 December 2013, the BMW Group had a workforce of 110,351 employees.

The success of the BMW Group has always been based on long-term thinking and responsible action. The company has therefore established ecological and social sustainability throughout the value chain, comprehensive product responsibility and a clear commitment to conserving resources as an integral part of its strategy.