BMW’s Mexico Plant to Offset Slower Sales Growth in China

BMW AG says the factory it will open in Mexico four years from now will help offset expected slower sales growth and lower profits in China.

The €925 million Mexican factory in San Luis Potosi will begin making as many as 150,000 cars annually in 2019. BMW has not said which models the facility will build.

IN 2014 BMW group sales in China rose 17% to 456,700 units. But Chief Financial Office Friedrich Eichiner hints to reporters the company's growth rate there could drop to a single-digit pace as soon as this year.

BMW aims to bolster its production in China by adding more models to its current lineup of X1 small crossovers, 3 Series small sedans and 5 Series large sedans. But analysts note that margins will be hurt by the cost of tooling up for more models. They also point to the fact that revenue in China is shared 50:50 with local partner Brilliance China Automotive Holdings Co. Ltd.