By on July 4, 2014

BMW Harald Kruger + Mexico President Enrique Peña Nieto

It’s official: BMW’s second North American assembly plant will be built in Mexico, with production to begin in 2019.

Autoblog reports the $1 billion USD plant will be located near San Luis Potosí, and will employ around 1,500 to produce up to 150,000 units per year, the majority of which will likely take auto trains north to the United States as noted by BMW Group board member Harald Krueger:

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. The Americas are among the most important growth markets for the BMW Group. We are continuing our strategy of “production follows the market.”

As for what will be built, BMW remains silent on the subject. Early speculation points to 3 and 1 series production, as well as MINIs.

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30 Comments on “BMW Brings New North American Plant To Mexico...”

  • avatar

    No surprise after the recent UAW attempts to unionize the US-south.

    And Mexico having more free trade agreements makes this an even easier decision.

    • 0 avatar

      Agree! A prudent decision indeed, and the UAW won’t have to worry about exerting its negative influence on a provider of jobs in America’s South because they were completely by-passed. The UAW should be happy and proud!

      I hope to see more manufacturers move to Mexico to minimize the bad effects of unionization in America.

      One positive spin-off with more jobs for Mexico is that more of their people will stay home instead of coming to the US to suck our resources dry.

      • 0 avatar

        Agree as to the first point HDC. As to the second: I wish, but no such luck. A few auto plants will make no difference. All of Mexico, Central and South America know the door to a life of free riding is wide open. The border is a joke. Immigration law is a bigger joke.

        • 0 avatar

          thelaine, the immigration issue is well understood by all involved, but more jobs in Mexico does have a positive effect.

          I’ve lost three of my best skilled Mexican tradesmen to better-paying jobs in Mexico brought there by industrial expansion mostly from the North.

          Incidentally, my youngest son, who is a Supervisory Border Patrol Agent in SW Texas, is working 16-hour days, 7-days a week since the onset of this crisis. No 4th of July celebratory day off for him or the other supervisors.

          • 0 avatar

            @HDC – My brother bought a brand new home in Colorado Springs at the height of the housing boom and gets real irate when I point out it was built almost entirely by illegal aliens. Estimates have shown 10% of Colorado’s real population are illegals. We’re in such denial.

            Illegals crossing the border are fair game, but once at the job site, farm, restaurant, etc, they’re untouchable.

            But shipping jobs to Mexico is just the right thing to do. Vs overseas and China.

          • 0 avatar

            Mike, I was just in Colo Sprgs June 20/21. Yes, much work is done there by migrant workers, not just Mexicans. We saw them everywhere, doing menial jobs.

            We were there to pick up two Gauchos from Argentina to come work for my oldest son and his former father-in-law, now partners in a ranch in NM.

            Neither of these two Argentine cowboys spoke a word of Ingles. But they understood comer and McDonalds quite well.

        • 0 avatar

          I have found more people in denial than understanding, HDC. Thats how we got here in the first place. However, I’m sure you and your son understand quite well.

        • 0 avatar

          THe great late economist Milton Friedman explained many times that a modern welfare state cannot exist w/o enforced borders and immigration control – something the USA seems to uniquely lack.

          Friedman stated that any impoverished person w/ the ability to get in will do so to get benefits, while those that work will depress American wage levels.

          IT is now clear Friedman has been proven right. The Federal government exerts itself seemingly everywhere yet there’s one thing it just cannot seem to do, and that’s border control. Which actually is its job.

          Heck, it even precludes state and local government from showing that it can be done.

          • 0 avatar

            Amen Thornmark. All we get is Keynes. Fking catastrophe. More Friedman, please. Some growth and prosperity would solve a lot of problems…

      • 0 avatar

        I love it here in the southeast, but you perfectly explained the reasons BMW is better south of the border. Thank you.

        Also, lower cost of labor. Companies no longer have to go broke paying 30 bucks an hour to the union workers.

        • 0 avatar

          My neighbor is the CEO of a rather large Fortune 500 company. I think his total annual compensation is about $22 million or so. The #2 guy in his company lives in here too and I think his compensation is somewhere in the $8 million range a year. I am curious how it is so offensive that a worker get paid $20-$30 an hour but a guy like my neighbor making effectively almost $11,000 an hour is not? Even better yet, I have an NBA buddy in here who is also in the $20 million a year range and I broke his salary down one day because they don’t play all year down to something like $50,000 an hour. $50,000 an hour to toss a ball around but somehow no one seems to have a problem with that.

          It is not even like these companies pass the savings on to you, they, especially BMW, will keep charging their ridiculous prices and pocket the profits for themselves. Take the airline companies for example, they are raking in some of the best profits ever in history, but they are still looking to cut costs by charging people for everything and on top of that some of them are eliminating ketchup and olives to reduce costs.

          The end result is you will be driving a Mexican made BMW for the same money, that’s it.

  • avatar

    Great! High quality German cars produced in a country well known for
    the high quality of everything it produces (well, maybe some of the
    dope is high quality …).

    • 0 avatar

      Agreed. Didn’t the Germans learn their lesson when they started production of the Golf in Mexico? The quality was absolutely terrible. Wife had 2 that were nightmares to own. I’ve never seen a car that had so many breakdowns. Japan had/has the same problems with Nissan suppliers like Clarion. A BMW produced here isn’t the same and I’m sure worse will be felt and said when a Ultimate Driving Machine carries a badge stamped with Made in Mexico. No savings or ownership merit for future BMW owners.

      • 0 avatar

        From a profit perspective, I think this is genius.

        Most consumers looking at a BMW won’t know – or care – where the thing is built.

        They’ll ditch it when the lease is up.

        However, that second or third owner will care.

        And yes there will be no cost savings. If they can increase their margins, they’ll pocket that difference for sure.

        Business as usual.

        Also, ex-2 VW owner here. Never again, Mexico or elsewhere.

    • 0 avatar

      BMW’s new definition : Bavarian Mexico Works just sounds right.

  • avatar

    I get making the TRUCKS over here, as it just saves massive shipping costs….and the euros don’t buy them at $10/gallon.

    I do care that the GERMAN luxury car I’m buying is the EXACT SAME as the one I could buy in Munich or Paris. The car built to the EXACT SAME standards as the one that I could take to v max legally just a few KM away from the dealer.

    Once you make them “for the US market” then they aren’t the same, and you lost the whole unique selling point. If you are VW, then you are competing on price in the lower part of the market and then cheaper builds for a cheaper market make sense. (I still bought a Golf over a Jetta, build is just better.) BMW is high end, nosebleed price, and for that money I want the GERMAN HOME MARKET car.

    Sorry. Otherwise, you have nothing over Lexus and other pretenders.

    • 0 avatar

      I have little doubt that the BMWs built in Mexico will be just as unreliable as the ones built in Germany.

    • 0 avatar

      What makes you think you’ll be able to tell the difference between the same model assembled in two different locations besides by the first digit of the VIN? Manufacturing is a lot like the fast food industry, it’s highly proceduralized and standardized so the product can be replicated with the same result in a large variety of locations by a large variety of people.

      Mexican assembly plants already assemble some very high quality vehicles, there’s little reason to believe these BMWs would be any different than those assembled elsewhere.

      • 0 avatar

        It’s not the final assembly I’d be worried about, that will be largely automated, I would be more concerned about the supply chain. Parts will be sourced locally and while nominally passing all the same inspection criteria, who knows how they were assembled and from what raw materials.

        I’m sure Chinese powdered milk could pass all the tests to show it had the same nutrition and vitamin content as grass fed Vermont cow milk, but would you feed it to your kids ?

        • 0 avatar

          @[email protected]…Automated final assembly? Most of the automation occurs before paint.
          From that point on, assembly is performed, the way Henry Ford figured it out somewhere back in the 20’s

          If the Mexican worker is given the right tools, and the right material. The BMW will be as good as one coming out of Baveria.

      • 0 avatar

        I’m not slamming Mexico or Mexican workers.

        What happens is the quality of the suppliers isn’t quite the same. German VW vs. Mexican VW.

        Look at the rubber trim seals and plastics (no, not the infamous hard dashboard) around the doors and the interiors. Rugs and seat fabrics. The design may be the same, but the overall quality and QC from end to end isn’t the same. My German Golf is much different than the Mexi-Jetta in the details and the quality of the individual bits.

        • 0 avatar

          @Speedlaw – Wasn’t it VW that cut the corners? Cheapening out the Jetta for cheapskate Americans including Mexico, and South America? Weren’t the Mexican suppliers just following very specific specs?

      • 0 avatar

        A lot of us aren’t concerned about the quality but simply find it offensive that a company that charges as much for their vehicles as BMW won’t build in a first-world nation. It’s not like their margins are too thin. It’s not like they’re going to pass the savings down to the customers. For a “prestige” brand, this is some Wal-Mart shit.

        The funny part, as others have noticed, is that your average BMW leasee isn’t going to know or care where the car is made. So I’m sure Mexican 3-series will fly off the lots.

        Personally, when I shell out a lot of money for something, I expect it to be made somewhere other than the absolute cheapest place possible. But I understand most people don’t want to be informed consumers or take any responsibility for how their money is spent.

        • 0 avatar

          BMWs are “imports” regardless. At least they’ll be “American Made”. But you’re right, 3-series are among the most profitable in the world, right behind pickups from the Detroit Tres Amigos.

          Now I do have a big issue Ram and GM pickups made in Mexico entirely, and or mostly from parts made in Mexico. They’re pimped on their USA heritage and tradition too. And the Hecho en Mexico F-Super Duty Diesel engines.

  • avatar
    el scotto

    Oh, so the the “Ultimate I’m Trying to Impress Others in the Company Parking Lot and No, I’m Not Really A Great Big D-bag Ultimate Sitting in Traffic Commuter Driving Machine” will now be built in Mexico? Pfft.

  • avatar
    Kyree S. Williams

    As far as quality goes, it seems like a lot of the factory-installation failures we hear come from stateside manufacturers, like GM releasing a batch of Sonics that were missing some brake pads and Encores with improperly-installed steering wheels. Other than that, flaws in today’s vehicles seem to come more from the engineering phase and not from how they’re put together. If the Mexican plant is anything to worry about, it’s only because it’ll be *brand* new and there will be some fine-tuning to do. It won’t be because Mexico can’t replicate the same quality (or lack thereof) as the Bimmers assembled in Germany or anywhere else.

    And as far as the authenticity goes of a BMW assembled in Mexico for the U.S. market, I’m beyond caring. Most luxury cars are simply the “idea” of exclusive luxury anyway; you can do just as well with a cheaper, non-luxury-badged car a lot of the time (that doesn’t make me want a BMW any less, but still…) Unless it’s a Rolls-Royce or a Ferrari, I really don’t care where it’s assembled.

  • avatar

    Agreed. I’ve said this many times. The worker on the line, has very little impact into over all build quality. Perceived or otherwise.

  • avatar

    BMW = Bavarian Mexico Works
    BMW owner’s will look like even bigger tools after everyone knows the birth place of there new Mexican crap wagons.

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