Car News

BMW to Build 3 Series in Mexico Starting in 2019

BMW says 2019 will see the company resume building its 3 Series sport sedan in North America with the opening of its second factory on this continent, located in San Luis Potosi Mexico. The company marked the start of construction yesterday with a groundbreaking ceremony.

The German automaker, the latest in a line to establish a manufacturing presence in Mexico, says it plans to invest US$1 billion in the facility; BMW employees from Munich and Spartanburg, NC will be brought in to get the plant up and running, as well as to eventually hire and train 1,500 employees. Mexican media are reporting BMW received $236 million from that country's government to help get the project off the ground, and the manufacturer will be exempt from paying taxes there for 10 years.

This will be BMW's second production facility in North America; its Spartanburg, NC factory opened in 1994 to build the 3 Series, but now mostly builds SUVs, 70 percent of which the company says are exported (and we're assuming that includes those sold in Canada). The Mexican plant will handle assembly and painting of the cars, but drivetrains will be imported from Germany to be bolted into the assembled cars. The 4 Series coupe will continue to be built in Germany.

Mexico is proving popular as an automotive manufacturing hub thanks to low labour costs and the country's inclusion in the North American Free Trade Agreement (NAFTA), which allows foreign automakers to circumvent import duties imposed on vehicles built outside the continent.