Report – BMW weighing on building Mexico plant image

According to the Wall Street Journal, the luxury segment global leader, BMW is now in advanced discussions with Mexican officials, as it wants to build a $1.5 billion facility, further highlighting the country’s manufacturing hub status.

According to government officials who talked to WSJ on condition of anonymity, the proposed plant should produce 1 and 3 Series models, it could be open for business from 2016 and BMW could make an announcement as early as the first quarter, even though the location has not been settled.

“We explore different countries as potential locations for future production sites,” said Mathias Schmidt, a BMW spokesman. “However, there has been no decision to set up a production location in Mexico. ”

“With the European markets still in recession, there’s an increasing need for manufacturers there to explore a broader range of markets,” said analyst Mike Jackson at the research firm IHS. “BMW has a good reason to look to Mexico because the market is maturing and is a good platform to export to the U.S. and also Asia.”

The company could seek boosting its presence in low-cost, fast growing Latin American markets –it already started to build its first plant in Brazil, while the Mexican facility, taking advantage of the lower labor costs would be used to boost capacity for the recovering US market.

Via The Wall Street Journal