BMW considering Mexico factories for 1 Series FWD and 3 Series vehicles

News | August 7th, 2012 by 6
BMW 3 Mexico 1

According to Automotive News, BMW is close to making a decision on the opening of a second plant in North America, this time, in Mexico. BMW is considering as many as four Mexican locations for a site to build the 3 Series sedan, and the Munich-based automaker is currently negotiating with local government for tax breaks and incentives.

One source told AutoNews that the state of Queretaro is in pole-position.

The final decision is due in 2013, and if greenlighted, production of cars will begin in late 2016 or early 2017.  The plant will also host assembly lines for the upcoming front-wheel-drive vehicles which debuts next month at the Paris Auto Show.

BMW 3 Mexico 1

Capacity at the Mexican plant eventually would be 100,000 to 150,000 vehicles annually, a source said. Production will slowly begin at 40,000 or 50,000 units. Similar production levels were seen at the Sparntaburg plant when it launched in 1994.

One of the reason to build BMW vehicles in Mexico has to do with the trade agreements between Mexico and other North American, South American or Asian countries. Trade among Mexico, Europe and the Mercosur countries of Brazil, Argentina, Uruguay and Paraguay is duty-free. Please note that Brazil is one of the fastest growing markets for BMW.

Another U.S. plant was considered at some point, but the idea is not news anymore.

Moving production of the high-seller 3 Series to Mexico will allow BMW to protect itself from currency fluctuations that will keep the vehicles’ prices in check.

Audi, one of BMW’s strongest competitor, is also launching their first North American plant in Mexico in 2016.

[Photo by Carscoop]