German automobile producer BMW has announced that it will invest $1 billion in its first production plant in Mexico, which is to be built in close proximity to the city of San Luis Potosí. BMW board member Harald Kruger said the new plant will have an annual output capacity of 150,000 cars. The plant will begin assembling cars in 2019, while creating 1,500 jobs.
Since Mexico is a member of NAFTA, the new plant in Mexico will provide BMW with tariff-free access to the US automobile market. Commenting on BMW's North American strategy, Mr. Kruger said, "This decision underscores our commitment to the NAFTA region. We have been building BMW cars at our US plant in Spartanburg for the past 20 years. With a planned annual capacity of 150,000 units for the new plant in Mexico, the BMW Group will be even better positioned to take advantage of the growth potential in the entire region. The Americas are among the most important growth markets for the BMW Group. We are continuing our strategy of "production follows the market."
BMW already has 23 production plants in 13 countries and is building a new plant in Santa Catarina, Brazil, which will start production later this year.