BMW Looking at Mexico for New Plant to Build the 3-Series and New FWD Models

Two decades ago, BMW announced its intentions to build its first ever plant in North America and specifically, the US.

The production facility based in Spartanburg, South Carolina, started operating in 1994 and even though it initially churned out the 318i followed by the Z3 in 1995 and then the X5, in the past few years, the X6 and X3 SUVs were added while the X4 is also set to join the all-SUV line-up in about two years’ time.

Now, according to a report from Automotive News, the German carmaker is mulling the addition of a second plant in the American continent. Only this time it won’t be in the US, but south of the border.

As company sources revealed, BMW is currently looking at four different sites in Mexico and negotiating with local authorities. No decision will be made until next year, but said sources claim that the state of Queretaro in north central Mexico is the leading candidate.

If the plan gets the green light, the new factory will become operational in late 2016 or early 2017 and have an initial capacity of 40-50,000 units, topping up eventually to 100-150,000 cars.

The models that will come out of the production line will be the 3-Series and most likely, the first generation of front-wheel drive BMWs, which will be based on the next 1-Series that will bow in 2017.

BMW is rapidly expanding its production capacity, having already confirmed that it wants to acquire the Mitsubishi-owned NedCar plant in Netherlands.

Relocating some of the 3-Series production away from Germany will enable the company to lower costs and adopt a more aggressive price strategy. It’s something its main rivals have already figured out, with Mercedes-Benz set to start production of the C-Class in its Vance, Alabama plant in 2014 while Audi is also picking Mexico for a new site that will manufacture an SUV.

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