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New $1 billion BMW plant scheduled for Mexico

Plans are in the works for a $1 billion investment in a new BMW production plant in San Luis Potosi, Mexico. The new plant will employ 1,500 workers and produce about 150,000 units each year.

BMW did not disclose which models it will build at the plant, but did say the new plant, combined with BMW’s plant in Spartanburg, S.C., underscores BMW’s commitment to the North American Free Trade Agreement region — Mexico, Canada and the United States.

Company board member, Harald Krueger, says, “The Americas are among the most important growth markets for the BMW Group. We are continuing our strategy of ‘production follows the market.’”

This news comes shortly after BMW’s previous announcement that the company, in a joint venture with Renault-Nissan and Daimler, will build a $1.36 billion plant in Aguascalientes, Mexico. This plant will allow them to produce compact vehicles for their Infiniti and Mercedes-Benz line.

The world-renowned car company acknowledges that Mexico’s large number of international free trade agreements — within the NAFTA area, with the European Union and the MERCOSUR (South American trade bloc) member states, for example — was a decisive factor in the choice of location.”

The famous automaker currently has more than 100 suppliers throughout Mexico, doubling their numbers over the past four years. Krueger says that BMW has “already reached an initial agreement with worker representatives in San Luis Potosi,” and is optimistic there will be more supplier opportunities in the future.

Andreas Klugescheid, corporate and government affairs head of communications for BMW’s production network, says that supply sourcing in Mexico in 2013 totaled $1.61 billion dollars. The car company sold 13,992 vehicles in Mexico last year, a year-over-year increase of 18 percent. Motorcycle sales were also up by 17 percent, totaling 2,064 sold units.

BMW Group announced their $1 billion investment at the at the Spartanburg plant to boost capacity to up to 450,000 vehicles by the end of 2016. This boost will make that plant the largest in their international production network.

Mexico President, Enrique Peña Nieto, says that “Mexico is sending a clear message to the world that it’s in a state of transformation,” referring to political, fiscal and telecommunication reforms since his government took office. He also says that his government has attracted $13 billion of investments in the automotive sector.

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