Report: BMW May Make 1 Series, Mini in Mexico

BMW AG is pondering a plan to assemble Mini and next-generation 1 Series small cars in Mexico, according to Germany's Handelsblatt newspaper.

The company has said it will need a second factory in North America to increase local production capacity. The BMW board is expected to decide later this year where to put the North American facility, which is intended to make the company's best-selling rear-drive 3 Series small sedan.

But BMW likes the idea of equipping the facility to also produce the front-drive Mini and 1 Series, which will share the same platform, according to Handelsblatt. The newspaper says the company favors Mexico over the U.S. or Canada because of its lower production costs.

BMW is hiking annual capacity at its SUV plant in Spartanburg, S.C., to 450,000 units. The company currently makes the Mini in the U.K. This summer it also will begin buying several tens of thousands of Minis from Dutch contract assembler VDL Nedcar.