Trump Angers the Germans; BMW Won't Pull a Ford With Its Mexican Plant
After being warned against producing vehicles in Mexico, German automakers are not scrambling to re-think their production plans.
In an interview with the German publication Bild, President-elect Trump issued a now-familiar warning to the country’s manufacturers — essentially, any vehicles imported into the U.S. from Mexico will face a 35 percent tax.
The Germans, for the most part, aren’t buying it. Meanwhile, the country’s economy minister saw Trump’s remarks as an opportunity to engage in some not-so-friendly automotive ribbing.
“If you want to build cars in the world, then I wish you all the best. You can build cars for the United States, but for every car that comes to the USA, you will pay 35 percent tax,” Trump told Bild (via Reuters), before singling out an automaker with future Mexican plans.
“I would tell BMW that if you are building a factory in Mexico and plan to sell cars to the USA, without a 35 percent tax, then you can forget that.”
Trump’s latest warning comes after similar remarks to U.S. and Japanese manufacturers. BMW plans to build the next-generation 3 Series at a Mexican plant starting in 2019. The facility, not yet built, carries a $1 billion price tag.
However, unlike Ford, which recently kiboshed plans for a $1.6 million facility south of the border, BMW isn’t about to be swayed by threats.
“Trump’s comments aren’t really a surprise,” Peter Schwarzenbauer, head of BMW’s Mini and Rolls-Royce brand, told media at a Munich press conference today, according to Bloomberg. Schwarzenbauer said he saw “no reason” to pull a U-turn on the company’s plans.
German auto industry association VDA president Matthias Wissman took a similar tone, stating, “We take the comments seriously, but it remains to be seen if and how the announcements will be implemented by the U.S. administration.” The industry head said he anticipates pushback from U.S. Congress on any tariff proposal, given the long-term consequences of such a move.
While industry types kept things civil, the government was having none of that. In the same Bild report, German Economy Minister Sigmar Gabriel said the U.S. should focus less on attacking the competition, and more on building cars that people might actually want to buy.
Oh no he didn’t!
No doubt, German automakers are playing the waiting game while keeping an eye out for concrete policy from the incoming administration. Meanwhile, BMW already plans to boost production at its Spartanburg, South Carolina SUV plant to 450,000 vehicles per year, up from 411,000 last year.
[Image: BMW Manufacturing Co.]
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Now, now, schmitt trigger, don't judge too hastily. He gets intense competition from mtmmo....
the only people who are going to have money left to buy cars are where governments have space on their balance sheets to widen out consumer borrowing. that would be the asia region. and before they have sucked all the water out of the ground to support non performing housing capacity expansion, they'll need to painstakingly groom those taxpayers and borrowers to the finer qualities of stealing money with a generous upfront advance on their development. the game hasn't gotten old yet, but they are sure cycling through at a faster clip.