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BMW to Build MINIs in Mexico?

P90144695-F56

It doesn’t take a mathematician to understand that building MINIs in the UK isn’t ideal if your biggest market is in the US. With currencies being what they are, it’s always made MINIs sold in North America much less profitable than those sold in Europe and elsewhere. Now BMW may finally have a plan in place to rectify this issue. Simply make them in North America skirting by all those currency issues.

Automotive News Europe is reporting that BMW Is considering building their second plant in North America:

BMW CEO Norbert Reithofer has said that the company will need an additional factory in North America to meet rising demand but so far the company has not said whether it favors Mexico or the United States for the plant. The automaker also has not said which vehicles it would build at a new factory. Handelsblatt said BMW executives favor Mexico for the factory and the company is considering building Minis and its smallest BMW brand vehicles there because these are lower margin vehicles and building them locally would boost profits. A decision on the plant will be made by the BMW supervisory board in the second half, the paper said in a report published Wednesday, citing company sources.

From our perspective it makes a ton of sense. Given that BMW stating that the Countryman will be leaving the production sub-contractor Magna Steyr and coming into the BMW production fold with Gen 2, something has to give. And with Oxford at capacity and the new plant in the Netherlands likely focused in building for Europe, moving some production to North America sense logical.

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Written By: Gabe

  • AMS

    From a build quality reputation standpoint, Mexico is no worse than Britain, but I have to admit that I would be a bit less interested in a MINI without any real link to the UK. The Britishness of the car is part of the appeal for me.

    I was never in any danger of buying a Countryman or a Paceman, so having those built elsewhere never really affected me at all.

  • J

    Seems to work for VW. Delivery times for the custom jobs would be much better. And no fear of your shiny new MINI sinking with the ship on the way over.

    • AMS

      Have they gotten better? I remember ten years ago, the expectation for Mexican Jettas was that they would go for about 90-100k and then fall apart.

      But, like I said, Britain has never been known for the amazing quality of their workmanship.

      • James D

        As opposed to MINIs going for 20K and falling apart? I like the sound of 90-100K MINIs…

        • AMS

          You’re right. I should probably have mentioned the poor reputation that British manufacturing has.

          Oh wait.

        • lawrothegreat

          Which countries actually have a great reputation nowadays ? In reality there are probably very few, with Japan being one of them. North American cars have a poor reputation worldwide too with the quality of interior materials etc.

        • AMS

          For overall build quality, Japan probably still reigns supreme. Germany is up there too and, I would argue, that for most part, the US has risen quite a lot I the estimation of many people over the past decade. Ford probably more than GM, even without the recent ignition switch woes, but all three of the Big 3 have improved over where they were at the turn of the century.

          That’s not, to me, the same issue as interior material quality. To my eyes and fingers, no one beats VW for making an interior feel more expensive than its price tag. Not even the other Germans. Nor the Japanese. The Koreans do pretty well, though. Some very nice interiors for the money in some Kias and Hyundais. And yes, as you point out, the US brands don’t come close most of the time.

  • ConcernedOne

    If they do, they better drop the price significantly since the production costs for labor will be more than halved. I’m worried that the already iffy quality, could become even lower in a country that has such underpaid workers, and national violence is at an all time peak.

    • James D

      Drop the price… hahahahahahahaha

  • Paul Niemczyk

    Anyone else noticed that eye bashing typo? “your” biggest market is in the US, not “you’re”.

    • Durrrhhh

      MF makes a million errors in their typing skills. I see a lot of sentences that say things like, “it was going for to…”, or something like that with two prepositions side by side in one sentence.

      • http://www.nathanielsalzman.com/ Nathaniel Salzman

        Like Gabe said in an earlier comment. If you see something, send in the specific issue to the contact form. We’re happy to edit. Just complaining about a lack of perfection isn’t actually constructive.

        • duh

          it’s not the readers job to proofread your $hit

        • http://www.nathanielsalzman.com/ Nathaniel Salzman

          So it’s only your job to complain then?

        • 123123

          no but it’s not your job to make up excuses, since you get paid and we don’t

        • http://www.nathanielsalzman.com/ Nathaniel Salzman

          Common misconception. This is a volunteer effort. Always has been. This is nobody’s job. It’s something we do because we enjoy doing it. We all have day jobs doing other things.

        • thefuture

          let it be known reddit/r/mini is a much more valuable source as is other auto car websites for leaks on future minis.

        • lavardera

          No, its his job to be an ass.

        • fishbert

          You forgot an apostrophe at the end of “readers” and you spelled “shit” incorrectly.

  • otter

    Unfortunately if they dropped the price they would loose the profit margin they are seeking. Occasionally companies use some of their increased profits to improve quality; so, at the very least I would hope that the build quality would not suffer much. Now, as AMS said, loosing the UK connection would be disappointing, at least for me.

    • TurbochargedChili

      They are already making a killing on each MINI sold. Moving production to Mexico would cut their overhead significantly. They would be able to cut the price accordingly, while keeping margins BMW high.

    • TurbochargedChili

      They are already making a killing on each MINI sold. Moving production to Mexico would cut their overhead significantly. They would be able to cut the price accordingly, while keeping margins BMW high.

      • http://www.nathanielsalzman.com/ Nathaniel Salzman

        MINI’s margins aren’t as wide as you imagine.

        • TurbochargedChili

          Funny you should say that, as I just read a report stating that BMW has made on average of 9.5% per car it sells. Switching production to Mexico, not only cuts down on tariffs, it also significantly cuts down on material costs, and labor. I’m sure that Mexican employees make at least 25-50% less/hour than their UK equivalents. Shipping costs would be significantly reduced as well. VW was able to increase the size, quality, performance, standard features, and refinement on the Golf and GTI MkVII, while lowering the price by 1000′s of dollars for the Canadian market, and the car only increased $100 in the US, eventhough it has much more standard equipment than before. BMW is taking in the dough on every car it sells. Can you explain how they are not making higher profit margins than VW does, eventhough the GTI is larger, has higher quality materials, standard backup camera, touchscreen audio, more power and torque? Even the previous GTI was priced equivalently to the MCS, eventhough it was built in Germany where labor costs are even higher than UK.

        • http://www.nathanielsalzman.com/ Nathaniel Salzman

          Would love to see the report you’re referencing.

          BMW has some models on the higher end of its product lineup that are extremely profitable, but so far the margins on MINIs haven’t been wide enough to keep the company fully sustainable. The shared UKL platform is an outcome of that reality — that BMW needed economies of scale to keep MINI profitable. Regionalized manufacturing is another tactic to help with profitability, but to describe MINI as a fundamentally high-margin product is simply not accurate.

  • R.O

    If BMW starts to build MINI’s in Mexico, no more MINI for me. Cheap labor and takes away Union jobs (MINI in England – Oxford is a Union shop).

    • James D

      Yeah, those union workers have sure produced a fine automobile, except for all those known pesky problems…

      • R.O

        Ok, except the majority of these “pesky problems” are engineering design issues and not poor building/assembly issues.

        Moving production to Mexico (or other similar countries) where worker health and safety is poor and working conditions are also poor, do you really believe those pesky problems won’t happen or will go away?

        Stop blaming Union workers for design problems and similar. It’s Managements job to Manage and run the company.

    • Jason

      Well you might as well leave now since they’re already building the Countryman there…

  • JonPD

    Funny I remeber a lot of MINI community bashing when Fiat and VW started building in Mexico but have to say it makes sense. Also to those that worry that it will break the link with MINI being a UK car I would point out the R60 that has long ago broken that link.

  • piper

    BMW/MINI is as willing to sell its soul for profit as all the rest of the multi-nationals and it is disgusting. Mexican VWs and Chinese Teslas — who the hell needs a MINI that badly. Why doesn’t BMW build BMWs in Mexico? Of course, the company knows that BMW would lose a hell of a lot of its luster in the minds of BMW customers and potential customers and sales to decline. German cars should be Made in Germany — plain and simple!

    • Herr26

      They are currently building a plant in Brazil to accommodate BMW X1/ MINI Countryman , BMW 2er Active/Gran Tourer and the next BMW 1er. Putting the jingoism to one side. as long as the car is manufactured to the standards in production and quality developed in Germany then there should be no issue. We do not have this issue with the X vehicles built in Spartanburg nor with the BMW 3er manufactured in South Africa for other markets. That where its built argument has long since passed. Customers just want a BMW.

      • Chris Underwood

        I have no qualms about buying foreign-made cars in general. No flag-waving jingoism here. That said, I will not buy a car of any marque hecho en Mexico. Build quality is a concern, but beyond that Mexico is a huge drain on the US economically and a not insignificant source of crime and other social issues.

        I’m probably in the minority (most people here still shop at Walmart after all), but I’m sure I’m not alone.

        I’ve been a big MINI fan (I’m on my third one) and in spite of my distaste for the F56 I’ve been very hopeful about the forthcoming Clubman. Hopefully BMW either makes a course correction on the direction they’re taking the brand. I’m really not interested in an overpriced Ford Focus.

    • Nick Dawson

      BMW already assembles the following models in Malasia:

      3 Series 5 Series X1 X3 MINI Countryman 3 Series GT (from June 2014)

      Local assembly by-passes the huge import duties imposed on foreign cars, and has led to a reduction in the retail prices of the above cars. Guess what? Sales have increased and, as a consequence, the number of BMW and MINI dealerships has grown from 16 to 36.

      • Nick Dawson

        It is worth adding that in addition to Malaysia, BMW also assembles the MINI Countryman at its assembly plants in Thailand, Indonesia, and India, from CKD kits shipped out from Graz. Local content in the cars varies according to custom regulations in the respective country.

        • UK/EuroorBust

          And those vehicles built there are for those local markets, not Europe or North America. Who is going to buy a Malaysian car for $50,000?

        • Nick Dawson

          Of course they are built for the local market, that’s the whole point.

          The sort of customer who can afford to buy new BMWs and new MINIs in South and South East Asia, are discerning and fully aware that the cars are built to exactly the same standard, irrespective of where they are built in the world. They are more than happy to pay lower prices for locally assembled models.

  • ml

    This is was Mazda did with the Mazda 3. I get why they would do it from a profitability aspect, but if I want a British car I want it to be made in Europe at least. If I wanted a Japanese car, I’d want it built in Japan. Mazda probably lost some customers because of it and I’m sure MINI would too. Nothing against Mexico, but it’s a borderline third world company and I feel it would be like building them in China…

    • ml

      Yikes, sorry about the typos! ;)

  • chris

    I’am from mexico, and i agree that making the car here will Take apart some of it’s value (not saying that i would be a less quality car, here We have almost all brands of carmakers) but i think that will make it loose some of the car spirit :(

  • http://www.alphabetcityblog.com/ Jeff

    Few cars are as associated with their place of manufacture as Mini is – and BMW has hammered that point home for more than a decade in their marketing. Will they still sell you a Union Jack roof decal for your Mexican Mini?

    I think it’s a big mistake for them to consider this. Nobody’s going to pay $30,000 for a Mexican-made small car. They only do that now because the fact that it’s a British import carries a bit of cachet – not for anything special about its build quality, but for its heritage and “exoticness” (yes, the UK is an exotic land to many Americans, and there aren’t many cars on sale here that are built there). If that’s broken, BMW can automatically take about $5,000 off the price most Americans would be willing to pay for one. Does it cost more than that to ship a car over here?

    Maybe I could see them building a new Mini One in Mexico for the American market. But Coopers, at least, need to stay made in the UK.

  • Mike Hostutler

    Lower costs, faster build times, faster turn of vehicles, and more profit. <– What BMW thinks will happen if they build cars in Mexico or the US. Loss of heritage, reduction in build quality, flooded market, and devaluation of the brand. <– What will actually happen if they build in North America. I want my MINI built by blokes, keep production in the UK, or at the very least in Europe. Part of what makes MINI’s cool is that not everyone has one, lets keep it that way.

    • lavardera

      any car company would gladly trade this ^ customer for 3 or 4 that don’t care about any of that shit.

      • Chuck Jr.

        Very true! If we stop buying things when the manufacturer moves to China (or Mexico), the economy would be in the gutter. C’mon folks. Do you not buy SONY brand electronics if they’re built in Japan? How about Apple products (I own many). Is “designed in California” label enough for you? My April 2003 built R53 had numerous problems from day 1. I’m guessing the “blokes” who built mine was drunk that day, since UK produced cars apparently superior.

        • Chuck Jr.

          And forgot to mention… We’ve long passed the “not everyone has one” stage with MINI. Back in 2002, that was certainly true. You might live in a remote location but, around Los Angeles, they’re as ubiquitous as Toyotas or Hondas.

  • MikeUK

    This thread certainly seems to be more about ignorant racial perceptions than logical discussion. The UK motor industry certainly once had it’s fair share of unreliable cars, be it from design or build practices. However, this is also the country that designed and built Rolls Royce cars, synonymous with quality and luxury. That’s something the US has never had a reputation for (here in the UK). Why now are most Formula 1 cars designed and built in the UK?

    Nowadays most car big companies in the UK have global production line designs and practices anyhow. A Japanese car should be the same wherever it’s built because they dictate just how it’s built. Aside from such things as the spiders in Toyota’s, I should think a reputable car company will maintain standards worldwide.

    We’ve all heard of the stories of American cars coming off the production line with a worker’s sandwiches built into the door, UK cars never actually making off the production line in the first place, and Italian cars rusting away and leaking oil. This has as much basis in reality now as the perception that all Americans are fat and lazy, all French are smelly and all Scots are drunkards.

  • UK/EuroorBust

    I will absolutely NOT purchase any MINI/BMW product assembled or built in Mexico. I figured BMW AG would stay away from that temptation, unlike VW, but maybe they will not. If I am going to pay $30,000+ for an automobile, it will not be Made in Mexico. Sorry.

  • http://en.wikipedia.org/wiki/Godzilla Soundzilla

    Built in the UK is a huge attraction to me – Made in Mexico is not. The UK is part of this car’s lineage. I’d rather pay more for the car than to pay less and have it made in Mexico, even if the build quality were the same. There’s a principle involved and, as stated, a lineage to maintain that I believe is worth a premium.


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