It’s no secret that the trade war between the US and China is causing a lot of headaches for companies, both foreign and domestic. Due to tariff increases, Ford has recently announced huge losses, Harley Davidson has warned that it might not be able to continue production in America and there were rumors that BMW would slow production to the Spartanburg, South Carolina plant and kick some SUV production to other plants worldwide. However, BMW CFO (Chief Financial Officer) Nicolas Peter recently said that the Bavarians are fully committed to the Spartanburg plant and feel that this trade war will only be a temporary speed bump.
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“I am optimistic, and I think eventually men and women in charge will realize [that the trade restrictions] aren’t the best for citizens,” Peter recently told Automotive News Europe at an event in Paris. “It is not like ‘We invest here because of tariff issues.’ It is mostly about whether the market is growing.”
The trade war between the US and China is quite costly for BMW, though. Its Spartanburg plant manufactures all of the brand’s rear-wheel drive-based SUVs for the entire world market and China is a huge part of that. So it’s going to cost BMW a significant amount of money to manufacture China-bound SUVs in America. Still, BMW sees this is only temporary and, in fact, plans on increasing its investment in Spartanburg.
According to Peter, BMW is still committed to a $600 million investment into Spartanburg. And you don’t spend $600 million if you’re planning on slowing things down. BMW wants to increase production to about 450,000 SUVs annually there, which is a massive amount of production.
Although, BMW could increase Chinese production of certain SUVs as well, to help ease some tariff cost. It already started making some X3s in China this year. Volvo has also stated that it’s cancelling China-bound cars from its new South Carolina plant and building them elsewhere. So if the tariffs don’t end soon, it might force BMWs hand to shunt some production outside of the US. For now, though, BMW remains committed to its largest plant worldwide — Spartanburg.
[Source: Automotive News Europe]
BMW should close this factory and bring production back to Germany. It was never a good idea to set up a car factory in the US where it is always a headache to maintain quality. The trade war is a good reason to end this nightmare for good. The Americans can then carry on with their own Fords, Chrysler etc.
OK, Yes, that’s the best course of action, take your toys and go back home. That’s the adult thing to do, are you kidding me?
No, that is not the best course of action. However, when the US does not respect and appreciate the value of BMW’s investment in the US, there is no alternative. Making high quality cars in the US is no easy task, but BMW has maintained its investment perhaps you should therefore ask the US Government the questIon: “Are you kidding me?”
Also it was the US government which started the reference to and use of the phrase “trade war” and not BMWblog!
Bull, US government never used the words trade war. Hower, it was used frequently by the liberal média, which jumped at the opportunity to score one over the government.
What a big surprise that the US government never used the words “trade war”, said no one ever. The US government didn’t call the Vietnam War a war, either. I guess that never happened either…damn liberal media!
Give me a break, if BMW left the US they can’t afford to build a new factory just for X vehicles. They can’t survive without the US, so please don’t give me your holier than thou attitude. Secondly, and lets be truthful, BMW hasn’t made a real BMW since 2006, they’re too busy value engineering their cars and seeing water pumps, radiators and other parts die/fail before they should just to save a buck and spend it all on electric car development.
You think BMW can’t afford to build a factory for X vehicles elsewhere? I don’t think you really know what you’re talking about. For the record, BMW has production facilities around the world, including plants already which could make X models if they wanted to. BMW (and indeed, no global manufacturer) would be dumb enough to not have alternative plans.
It IS true that they’ve already invested a lot in Spartanburg, and no one wants to waste a good investment…but at some point, they may need to cut their losses. For the record, BMW has already announced that they will be producing the iX3 in China for sale globally–so if you were paying attention, you would already know that your comment isn’t based on fact.
And if you don’t think BMW has made a “real” BMW since 2006 (12 years ago!), then why are you even here? This is a blog site for BMW enthusiasts, not for political trolls.
You do everyone a disservice by the text in the headline of your article. You also contribute to and are perpetuating a falsehood. Your use of the language “Trade War” is incorrect. The US is conducting “Trade Negotiations” which sometimes requires developing incentives, both positive and negative, to get everyone, hopefully, to come to a mutually beneficial and fair deal. But you interpret and perpetuate that kind of language as a “Trade War”?
So, if I go out and try to negotiate the best deal possible on a purchase that is hopefully fair to all parties and not one sided, are you saying they have a right to say that I have assaulted them or maybe committed battery or better yet, I’ve escalated to War like behavior?
It’s a generally common used term, please don’t turn this into something political.
Fair point but did you see what “Marco” said below? I didn’t start that, it is how he and others are interpreting the language of the article. Trade War is mentioned 5 times throughout the article. It’s almost a subliminal message but I will drop it now.
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