BMW’s Mexican Plant is Full Steam Ahead
Mexico seems to be the destination for many motoring manufacturers right now and there is a good reason for this. The two major companies to start this phase were Ford and Audi, but now BMW have also just finalised a deal to have a plant built there too.
BMW planned to create the production plant in 2014 and promised to invest $1 billion dollars in doing so. The plant will be situated in San Luis Potosi, central Mexico and will accommodate the production of BMW’s bestselling vehicle; the 3 Series. The 3 Series is set for either a mid-cycle facelift or even a new generation by 2018, and therefore the opening of the factory and vehicle will coincide perfectly.
There are many reasons for why Mexico was chosen as BMW’s new plant location. The first reason is because of the cost of labour in Mexico. The cost of labour is low in relation to many countries especially when considering that there is a wide and hugely capable workforce. Mexican build cars will be able to be exported tariff free into the United States too, so that’s another bonus. Therefore it is no surprise as to why BMW ended up choosing Mexico as a location for its new plant. Mexico’s geographic location will also benefit BMW massively. With huge plants in South Africa and South Carolina, Mexico will offer an excellent link for BMW in their transatlantic network. Finally, in a deal just recently signed, the Mexican government has stated that the new BMW factory will be exempt from tax for the next 10 years; this includes federal and local taxation.
It is no wonder why BMW have created a new production plant in Mexico. We are sure that this may have been one of the smartest business options undertaken by the company (regarding production) in many years…