BMW Moves Ahead on Factory in Mexico, Hedges on U.K. Facilities

BMW AG says is moving ahead with plans to open a $1 billion carmaking complex in San Luis Potosi, Mexico, in 2019. But the company is preparing multiple options for the future of existing facilities in the U.K.

Chief Financial Officer Nicolas Peter tells reports the Mexico facility is “proceeding according to plan” in spite of threats by President Donald Trump to impose a 35% border tax on cars imported from the plant. The factory, which began construction last June, will have initial annual capacity to make 150,000 of the company’s 3 Series sedans. About 70% of the output is slated for the North American market.

CEO Harald Krueger met with Trump last Friday as part of a delegation led by German Chancellor Angela Merkel. He describes the meeting as “successful all-round.” He says he emphasized an apprenticeship program at BMW’s plant in South Carolina and the $10 billion worth of SUVs the facility exports per year.

But Krueger says the company is preparing multiple options for its factories in the U.K., depending upon the country’s trade deals after it exits the European Union about two years from now. BMW current builds Mini small cars in Oxford, Rolls-Royce ultra-luxury cars in Goodwood and engines in Hams Hall, England.