BMW to open Mexico plant in 2019

BMW claims it is set to open its new plant in Mexico in 2019 with a planned annual capacity of 150,000.

Harold Krüger, chairman of the board of management of BMW AG describes the Mexican facility as “the perfect addition” to BMW’s US facility. It wil certainly provide opportunities for German manufacturing equipment suppliers, like body-in-white specialists KUKA of Augsburg.

“In San Luis Potosí, we are going to invest US$1 billion over the next few years as well,” he said. “In doing so, we are stepping up our presence in the NAFTA region, and Mexico with its numerous bilateral and regional free trade agreements is a location with a particularly promising future.”  

While German automation firms like KUKA will be seeking part of BMW’s action in Mexico, there are reports that Swedish robot company ABB, an industrial robot maker and process automation systems provider, is currently negotiating with BMW to provide robots to its first plant in Mexico. Supply matters have been reviewed, where 100 suppliers participated, according to ABB's robotics manager, Sergio Bautista, who also commented that its plant in Munich will be partially copied in its plant in San Luis Potosi, in order to manufacture one of the BMW's products. Bautista added that there are automotive processes that will require new developments, especially for the final assembly, where opportunities for collaborative robots exist, which can be used by the human workforce without the necessity of security cells. 

Meanwhile, Krüger reckons that, according to forecasts, the global automotive market is expected to grow from about 80 million new registrations in 2014 to almost 100 million units in 2020.

“We want to participate in this future growth and our highly flexible global production network provides the foundation for this,” he said. 

Krüger adds: “With the expansion of our Spartanburg site and our new plant in Mexico, we are strengthening and expanding our production base in North America. This capacity increase is the prerequisite of future growth as well as a way to improve our natural hedging.” 

Like the Mexican plant, Spartanburg is receiving an investment of US$1 billion between 2014 and 2016.

“By the end of 2016, we will be able to produce over 450,000 vehicles per year at the site. At that point, Spartanburg will be the largest plant in our global production network. The expansion is also a response to the continuing trend towards SUVs,” claims Krüger.

As to the present, Krüger points to China which has experienced turbulent days on the mainland stock markets.

“The situation in BRIKT markets such as Russia and Brazil also remains tense,” notes Krüger. “There are numerous economic and political uncertainties that present a risk to the global economy and also affect the automotive industry.   Also, our industry must reduce carbon emissions further in line with regulatory requirements, which means a further large financial investment.”

                                       Focus on the long term

“Be assured, at the BMW Group, our actions will always be guided by a focus on the long-term. And it is always our goal to set the company on the right course for the future. That’s why we are constantly adapting,” declares Krüger. 

Krüger finds the trend in new registrations in Europe as “generally positive”. Markets such as Spain, Italy, Portugal and Ireland have experienced strong growth in the first six months. At approximately 44 per cent of all vehicles sold, Europe still remains BMW’s largest sales region. With 488,000 vehicles delivered, the BMW Group grew 9.5 per cent in Europe in the first half of the year.  

Krüger says that in the Americas, sales also climbed by 9.5 per cent.

“In the U.S., we delivered over 242,300 cars and BMW Group sales grew 9.6 per cent, which was twice the rate of the total US car market,” he notes.  “The generally positive mood among consumers in the United States is reflected in the automotive market. At the same time, competition is becoming even more intense. Many OEMs are currently transferring volume to the US, with a corresponding impact on prices.” 

In Asia, BMW delivered around 337,000 vehicles, an increase of 4.4 per cent year-on-year. In China, however, the development towards normalization of growth has accelerated. As the development is picking up pace, it also affects the exceptionally high growth rates in vehicle sales of the past few years.

“We always emphasized that this development could be expected and we anticipated this situation in our planning,” points out Krüger. “In the first six months of 2015, we sold over 230,700 cars in China, up 2.3 per cent from the previous year’s six-month figure. China will remain an important market for us with great potential. We are stepping up the number of locally produced BMW models in order to tailor our offering even better to the demands of Chinese customers.”  

In some emerging countries there is still a strong downward trend in new car sales. This is the case with Brazil and Russia. However, BMW Group’s sales figures in Brazil have risen for the past three years. In Russia they have declined.  

                                 Opportunities and challenges

“All this shows that the development in the global automotive markets remains uneven,” declares Krüger. “Clearly, this means there continue to be opportunities, but there are also challenges.” 

“We continue to follow a strategy of balanced global sales. This allows us to offset temporary market fluctuations,” adds Krüger. “For this – more than ever – we need a globally balanced and locally strong production network. Our global production network currently consists of 30 production sites in 14 countries – to ensure that our production will continue to be distributed evenly among the major world regions: Europe with sites in Germany, Great Britain and Austria as well as contract production in Austria and the Netherlands. Asia with our plants in Shenyang and Tiexi in China as well as our plant in India. And the Americas with our US site in Spartanburg and our new plant in Brazil.” 

At present, the X lineup accounts for almost one in three BMWs sold.

“With new models such as the X7 we are going to expand our offering “made in Spartanburg”, points out Krüger.    

Krüger adds: “Our strong and attractive premium brands are what makes our cars so appealing to customers all around the world. Today, the positioning of the BMW brand is broader and more diversified than ever before. The portfolio ranges from BMW i to the BMW core brand and BMW M. Our customers demand both sustainable and high-performance models.”  

In the first six months of 2015, BMW sold 12,500 electrically powered BMW i3 and i8 cars. Sales more than doubled compared to the prior year period. In the first half of the year, BMW also delivered over 30,500 BMW M and M Performance models to customers.  

In total, the company delivered over 1.099 million BMW Group vehicles to customers in the first half of 2015. Never before has the group sold so many cars in the first six months of a year.

BMW and MINI brands achieved new all-time highs. Rolls-Royce posted the second best first six-month sales to date. BMW remains the number one in the premium segment. BMW Motorrad achieved the best first half of a year on record, with more than 78,400 units sold. For our core brand BMW, 2015 is under the banner of the new BMW 7 Series. 

The new BMW 2 Series Gran Tourer went on sale in June. It is the first BMW in the premium compact class with up to seven seats. The BMW 3 Series has been the heart of the BMW brand for 40 years now. The model update of the BMW 3 Series – consisting of the Sedan, Touring and M3 – came out in late July. Fall will see the market launch of the new BMW X1 – with a head-up display and additional driver assistance systems. This second generation of the X1 is based on our front-wheel drive architecture. 

Another launch in fall will be the BMW X5 xDrive40e. As a first, this Sports Activity Vehicle combines an all-wheel drive with a plug-in hybrid powertrain. It is the first in a forthcoming wide range of plug-in hybrids in BMW’s model series. 

Overall, BMW and MINI are launching 15 new models and model revisions this year – almost as many as in the record year of 2014.

                                        BMW key financials

For the first time, BMW Group posted earnings before interest and tax of over €5 billion in the first six months of the year. The pre-tax Group result reached more than €4.8 billion, slightly above the level of the prior year period.

BMW to open Mexico plant in 2019

BMW claims it is set to open its new plant in Mexico in 2019 with a planned annual capacity of 150,000.

Harold Krüger, chairman of the board of management of BMW AG describes the Mexican facility as “the perfect addition” to BMW’s US facility.

“In San Luis Potosí, we are going to invest US$1 billionn over the next few years as well,” he said. “In doing so, we are stepping up our presence in the NAFTA region, and Mexico with its numerous bilateral and regional free trade agreements is a location with a particularly promising future.”  

Krüger reckons that, according to forecasts, the global automotive market is expected to grow from about 80 million new registrations in 2014 to almost 100 million units in 2020.

“We want to participate in this future growth and our highly flexible global production network provides the foundation for this,” he said. 

Krüger adds: “With the expansion of our Spartanburg site and our new plant in Mexico, we are strengthening and expanding our production base in North America. This capacity increase is the prerequisite of future growth as well as a way to improve our natural hedging.” 

Like the Mexican plant, Spartanburg is receiving an investment of US$1 billion between 2014 and 2016.

“By the end of 2016, we will be able to produce over 450,000 vehicles per year at the site. At that point, Spartanburg will be the largest plant in our global production network. The expansion is also a response to the continuing trend towards SUVs,” claims Krüger.

As to the present, Krüger points to China which has experienced turbulent days on the mainland stock markets.

“The situation in BRIKT markets such as Russia and Brazil also remains tense,” notes Krüger. “There are numerous economic and political uncertainties that present a risk to the global economy and also affect the automotive industry.   Also, our industry must reduce carbon emissions further in line with regulatory requirements, which means a further large financial investment.”

                                       Focus on the long term

 “Be assured, at the BMW Group, our actions will always be guided by a focus on the long-term. And it is always our goal to set the company on the right course for the future. That’s why we are constantly adapting,” declares Krüger. 

Krüger finds the trend in new registrations in Europe as “generally positive”. Markets such as Spain, Italy, Portugal and Ireland have experienced strong growth in the first six months. At approximately 44 per cent of all vehicles sold, Europe still remains BMW’s largest sales region. With 488,000 vehicles delivered, the BMW Group grew 9.5 per cent in Europe in the first half of the year.  

Krüger says that in the Americas, sales also climbed by 9.5 per cent.

“In the U.S., we delivered over 242,300 cars and BMW Group sales grew 9.6 per cent, which was twice the rate of the total US car market,” he notes.  “The generally positive mood among consumers in the United States is reflected in the automotive market. At the same time, competition is becoming even more intense. Many OEMs are currently transferring volume to the US, with a corresponding impact on prices.” 

In Asia, BMW delivered around 337,000 vehicles, an increase of 4.4 per cent year-on-year. In China, however, the development towards normalization of growth has accelerated. As the development is picking up pace, it also affects the exceptionally high growth rates in vehicle sales of the past few years.

“We always emphasized that this development could be expected and we anticipated this situation in our planning,” points out Krüger. “In the first six months of 2015, we sold over 230,700 cars in China, up 2.3 per cent from the previous year’s six-month figure. China will remain an important market for us with great potential. We are stepping up the number of locally produced BMW models in order to tailor our offering even better to the demands of Chinese customers.”  

In some emerging countries there is still a strong downward trend in new car sales. This is the case with Brazil and Russia. However, BMW Group’s sales figures in Brazil have risen for the past three years. In Russia they have declined.  

                                 Opportunities and challenges

“All this shows that the development in the global automotive markets remains uneven,” declares Krüger. “Clearly, this means there continue to be opportunities, but there are also challenges.” 

“We continue to follow a strategy of balanced global sales. This allows us to offset temporary market fluctuations,” adds Krüger. “For this – more than ever – we need a globally balanced and locally strong production network. Our global production network currently consists of 30 production sites in 14 countries – to ensure that our production will continue to be distributed evenly among the major world regions: Europe with sites in Germany, Great Britain and Austria as well as contract production in Austria and the Netherlands. Asia with our plants in Shenyang and Tiexi in China as well as our plant in India. And the Americas with our US site in Spartanburg and our new plant in Brazil.” 

At present, the X lineup accounts for almost one in three BMWs sold.

“With new models such as the X7 we are going to expand our offering “made in Spartanburg”, points out Krüger.    

Krüger adds: “Our strong and attractive premium brands are what makes our cars so appealing to customers all around the world. Today, the positioning of the BMW brand is broader and more diversified than ever before. The portfolio ranges from BMW i to the BMW core brand and BMW M. Our customers demand both sustainable and high-performance models.”  

In the first six months of 2015, BMW sold 12,500 electrically powered BMW i3 and i8 cars. Sales more than doubled compared to the prior year period. In the first half of the year, BMW also delivered over 30,500 BMW M and M Performance models to customers.  

In total, the company delivered over 1.099 million BMW Group vehicles to customers in the first half of 2015. Never before has the group sold so many cars in the first six months of a year.

BMW and MINI brands achieved new all-time highs. Rolls-Royce posted the second best first six-month sales to date. BMW remains the number one in the premium segment. BMW Motorrad achieved the best first half of a year on record, with more than 78,400 units sold. For our core brand BMW, 2015 is under the banner of the new BMW 7 Series. 

The new BMW 2 Series Gran Tourer went on sale in June. It is the first BMW in the premium compact class with up to seven seats. The BMW 3 Series has been the heart of the BMW brand for 40 years now. The model update of the BMW 3 Series – consisting of the Sedan, Touring and M3 – came out in late July. Fall will see the market launch of the new BMW X1 – with a head-up display and additional driver assistance systems. This second generation of the X1 is based on our front-wheel drive architecture. 

Another launch in fall will be the BMW X5 xDrive40e. As a first, this Sports Activity Vehicle combines an all-wheel drive with a plug-in hybrid powertrain. It is the first in a forthcoming wide range of plug-in hybrids in BMW’s model series. 

Overall, BMW and MINI are launching 15 new models and model revisions this year – almost as many as in the record year of 2014.

                                        

                                         BMW key financials

For the first time, BMW Group posted earnings before interest and tax of over €5 billion in the first six months of the year. The pre-tax Group result reached more than €4.8 billion, slightly above the level of the prior year period.

The Group net profit in the period under report stood at €3.2 billion. At 8.9 per cent, the EBIT margin in the automotive segment was within the anticipated profitability range.

Krüger claims BMW Group is “on track” to achieve the targets for the full year.

Krüger’s aim is for an EBIT margin in the Automotive segment in the target range of 8 to 10 per cent.  

Operating cash flow increased from €3.472 billion in the first half of 2014 to €.848 billion in the same period of 2015. In the same periods Group workforce increased from 112,500 to 119,589, while revenue increased from €38.140 billion to €44.852.