Mexican Media Brands
BMW Opens Mexico Assembly Plant as Tariffs Loom
BMW AG formally opened a factory in Mexico to make its best-selling 3 Series sedans for North American market and more than 40 other markets worldwide.
#economics
Share
BMW AG formally opened a factory in Mexico to make its best-selling 3 Series sedans for North American market and more than 40 other markets worldwide.
The $1 billion facility in San Luis Potosi will employ 2,500 people and has capacity to make 175,000 vehicles per year. BMW says the plant was designed to respond quickly and flexibly to shifting volumes and new model variants.
BMW notes that Mexico, a signatory for the updated version of the 25-year-old North American Free Trade Agreement, also has free trade deals other major markets, including the European Union and South America’s MERCOSUR trade bloc.
LMC Automotive estimates that the 5% tariff the Trump administration threatens to impose on Monday for all goods from Mexico would hike the retail cost of a car made at San Luis Potosi by at least $2,000.
If the tax rises to 2% by October as Trump warns, the cost would surge to $10,000 or more, enough to shut down the plant. the global automotive forecasting service says.
RELATED CONTENT
-
VW Warns of Higher Costs to Develop EVs
CEO Herbert Diess says the €20 billion ($23 billion) Volkswagen AG has budgeted to electrify its entire vehicle lineup won’t be enough to meet that goal.
-
China and U.S. OEMs
When Ford announced its 3rd quarter earning on October 24, the official announcement said, in part, “Company revenue was up 3 percent year over year, with net income and company adjusted EBIT both down year over year, primarily driven by continued challenges in China.” The previous day, perhaps as a preemptive move to answer the question “If things are going poorly in China, what are you doing about it?, Ford announced that it was establishing Ford China as a stand-alone business unit.
-
Tariffs on Autos: “No One Wins”
While talk of tariffs may make the president sound tough and which gives the talking heads on cable something to talk about, the impact of the potential 25 percent tariffs on vehicles imported to the U.S. could have some fairly significant consequences.
