According to Automotive News, BMW is considering adding a new plant in Mexico to build the 3 Series. The reason is that Mexico has cheaper wages, tax breaks and other incentives which make production less expensive than in Europe and the US. What Automotive news has apparently forgotten in their reporting of this story is that BMW already produces the 3 Series for the US outside Europe, in a location with cheap wages and other incentives- Roslyn, South Africa. BMW has recently spent a significant sum of money in South Africa upgrading the plant, which has a record of being one of the highest quality auto plants in the world.
BMW’s plant in South Carolina has been churning out products for decades now and is being expanded to build the forthcoming X4 and is expected to produce over 300,000 BMWs this year, so BMW is very familiar with building in North America. Audi is in the process of constructing its first plant on the continent in Mexico and Mercedes has several factories in the Southern US to keep costs down and maintain a close to final sale production system.
BMW is the USA’s largest exporter of cars, as all BMW X3, X5, and X6 vehicles are built in the US.
Our take on this is that BMW may be looking at a location to build the future front wheel drive BMW and MINI models to keep those costs down but the 3 series seems like a stretch to us considering the production system already in place. BMW is also flirting with NEDCAR in the Netherlands for future MINI and front wheel drive BMW production so this may just be a diversion to get better incentives for that location which is closer to BMW’s current suppliers. The BMW Group has also hinted at that they prefer the idea of not building a new factory considering there are many idled now and that initial investment is not needed- you can get a factory for a song these days.
If the Volkswagen Auto Group and their initial attempts at building newer model cars in Mexico (Jetta) is any indicator- local suppliers in Mexico have difficulty hitting standards and it has taken them many years to sort out those issues. Quality has improved but who knows what will happen with a new brand moving in to an unknown territory.
Considering Automotive News is reporting a FWD 1 Series entering production in 2017 (which will debut in a month), we’d take this report with a grain of salt.