BMW Group to build New Plant in the Mexican state of San Luis Potosi

As expected, BMW announced last week that it would build a new production facility in Mexico to handle assembly of key models destined of the North American market. What those models are won’t be known for some time. However you can guess that it won’t be X models since the massive Spartanburg South Carolina plant has that handled. That leaves the 3 and 5 series as volume sellers in the US market – perfect candidates in our minds. But perhaps more interesting is the MINI brand which counts the US as it’s largest market. Surely there’s a chance that BMW is looking at this possibility as well. That of course begs the questions – would you care of your next MINI was made in Mexico rather than the UK?

Here are the key facts on this week’s announcement:

  • 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

Official Release: 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.

  • rhawth99

    Ugh, No Mexican MINIs for me. I’d much rather have MINIs built in Spartanburg.

  • Kyle45

    Being a semi-British car, I feel that X-Factor would be lost for me if it were built in Mexico. I’m also doubtful that the price would change much, if at all. At some point, I’m sure most of the vehicles I lust for will be built in Mexico, but I refuse to accept it now. Plus, my “inner-snob” wouldn’t allow it! I hope production stays in Oxford and this plant is just for the BMW brand.

  • nervous

    Will the bulldog be replaced with a chihuahua?

    • smallerisbetter

      if that means we get the rocketman, i am all for it. yo quiero taco bell

  • Geeper

    And what’s wrong with Mexico or Mexican workers making cars? They seemed to do a great job with the Chrysler PT Cruiser and the VW Beetle… but hey! aren’t there Mexicans working at USA car plants? It makes perfect sense for left-hand-drive cars for the USA / Amerciana markets to be made in one plant while the European LHD market is made in Netherlands… leave UK plant to make Right-hand-drive cars for Britain and colonies. Remember the Paceman and Countryman are made in Austria – does that make them any less British?

  • Karl

    I don’t really mind – especially, if it speeds up production to delivery times. The worst part of every one of my orders is the time between being built, the time waiting at the port trying to get on a ship, and the sailing time. As far as being built in Mexico, I’m sure BMW Group will have the quality control in place to do a good job. I was extremely impressed years ago when I took the SC factory tour.

  • Nick Dawson

    The UK economy is booming and officially back to pre-2007 levels and, consequently, the Pound Sterling is getting stronger on a daily basis. This is good news for Brits going abroad on holiday or buying imported goods, but it’s not such good news for UK based manufacturers who depend on exporting their products, such as MINI, which will now be more expensive.

    BMW was very shrewd, therefore, to sign a deal with NedCar in the Netherlands to assemble MINI models, and assembly of F56 starts this summer at the NedCar plant. Furthermore, CKD MINI Countryman kits are now assembled throughout South and South East Asia, and the retail price of the Countryman in those markets fell on average by the equivalent of US$10,000, even before the Pound increased in value. Assembling F60 Countryman 2 in Mexico for the NA market makes good business sense.

  • JamesN

    People always forget that the original Mini was built under license in countries on every continent except Antartica. The VW Beetle was built in Mexico for around 3 decades and nobody seemed to care. In fact I know people in the UK who payed over the odds for Mexican Beetles so they could have a brand new car after it went out of production in Europe. The Mini will always remain British in it’s DNA, and foreign built cars are going to be rarer than the current 2 million unit toll of UK cars so they’re more likely to be desirable in the future. Oxford will always be MINI central, as Longbridge was in the past. And as much as I love my UK built classic Mini, I’d swap it in a heartbeat for an original italian built Innocenti.

    • anonymous

      It’ll be MINI central until BMW pulls the plug and drags the leadership to Munich with the rest of them. Minis were built all over, but weren’t necessarily the same from those places. The Innocenti Mini was built in Italy and had different features. Sadly I’m with the others, Britain or bust!

  • dr

    Country of origin may not be a reason for me to NOT buy a particular car…….But it is a factor. If the country of origin is a place known for cheap and/or inferior goods then I will transfer that perception to the car even if it is made to the OEM’s standard. Yes I would prefer to buy a VW made in Wolfsburg than Puebla…But I love german stuff. I buy everything from knives to kids toys because they are made in germany This works both ways…..I would not likely have bought a british rover mini in 2002….I had much more confidence in this unknown and untested brand because underneath all the parts had the roundel molded into them. FWIW….I would still be hesitant to buy a jaguar or a land today, even though by all accounts the brits have pulled them together well.

    Consumer perception is slow to change….The average person needs to hear 10 good stories to overcome the one bad story they hear. We can try to do a mental override based on hard data but there is always going to be a lingering pull toward our perceptions