BMW to Open Hungary Plant

BMW AG plans to invest €1 billion ($1.2 billion) to build an assembly plant in Debrecen, Hungary, that will have the capacity to make 150,000 vehicles per year.

BMW says the site—its first new facility in Europe in about 20 years—will help the company maintain a global production balance between Asia, Europe and the Americas. The new factory also will help the carmaker avoid potential import tariffs amid looming trade wars between the U.S. and Europe.

Europe accounted for about 45% of BMW’s sales last year, and the carmaker’s year-over-year sales in the region were up 1% through the first half of 2018. But BMW imports its hot-selling crossover vehicles into Europe and China from the company’s Spartanburg, S.C., plant.

Construction on the Debrecen site, which is located about 125 miles east of Budapest, will start in the second half of 2019. The plant is expected to employ about 1,000 people.

BMW didn’t say what models the factory will produce or when the facility will open. But the company vows the plant will set “new standards” in flexibility, digitalization and productivity.

The new complex will be able to produce traditional combustion engine vehicles and electrified models on the same line, a capability all BMW plants in Europe will share in the future.