BMW Group to invest US$ 1 billion in new plant in Mexico

The BMW Group held its ground-breaking ceremony to signal the start of construction of the new Group plant in San Luis Potosi, Mexico.

The full plant will comprise a body shop, paint shop and assembly, characterised by an innovative production system and comprehensive sustainability standards. The Group is investing around US$ 1 billion (Rs 6,740 crore) in the new plant while creating at least 1,500 new jobs.

BMW 3 Series sedan production to start from 2019

San Luis Potosi will build the BMW brand’s best-selling model series, the BMW 3 Series sedan. The San Luis Potosi plant will also balance out production capacity at the Group’s plant in Rosslyn, South Africa, which will build the new BMW X3 instead of the BMW 3 Series in the future.

The start of production is scheduled for 2019 with an annual production capacity of up to 150,000 units, making it the Group’s most resource-efficient production location worldwide. The decision to locate in San Luis Potosi was based on criteria such as the broad supplier network and qualified local workforce, as well as the technical and social infrastructure.

Cutting-edge technologies at new plant

L-R: Hermann Bohrer, president & CEO Plant San Luis Potosi; Oliver Zipse, board member for Production BMW Group; Dr Juan Manuel Carreras, governor of San Luis Potosi; Milagros Caina-Andree, board member of BMW AG for HR; Rogelio Garza Garza, undersecretary of Industry & Commerce Mexico at the ground-breaking on June 16. 

Board of Management member for Production, Oliver Zipse, believes the new plant in San Luis Potosi will be a special location: “All of the BMW Group’s knowledge and capabilities will be on show at our new location in Mexico. The production system being established there will be a leader in productivity and sustainability, thanks to the use of innovative technologies. I am delighted to launch this ground-breaking BMW Group plant on its way.”

Milagros Caiña-Andree, board of Management member for Human Resources further underlined the BMW Group’s role as an employer, “Our success depends above all on the people who work for us. Their capabilities create our products. They form the strong foundation of our new BMW Plant San Luis Potosi. For this reason, it is also important for us to be an attractive employer here, to inspire passion for the BMW Group among employees, to encourage their ambition and develop their talents.”

San Luis Potosi's State Governor Juan Manuel Carreras López commented: “The BMW Group is an important partner for our state and will help to further develop the industry in the region. San Luis Potosi is an attractive state for the automotive industry with skilled workers, a logistically interesting location and the necessary infrastructure for the development of this kind of projects. In San Luis Potosi, we are ready to support the industry.”

New standards for new plant 

The Group is aiming to set up new standards with the new plant, for example, the use of renewable energy sources ensures that the plant is supplied with 100% CO2-free electricity. Most of the electricity comes from a solar system on the plant’s grounds.

Responsible use of water resources is a particular sustainability goal in San Luis Potosi. The facility will have the lowest water consumption per vehicle produced in the production network. This will be the BMW Group’s first paint shop to produce zero process waste water. The water needed for the painting process is reconditioned and recycled.

The BMW Group is relying exclusively on digital 3D plans for both building construction and equipment installation at the plant. During every phase of construction, architects enter specific information, such as location, dimensions or completion date into digital models. Digital 3D-scan technology will be used for the first time during the set-up phase. The combination of these two technologies will enable real-time analysis of construction progress and cost-efficient modifications, providing the Group with constant planning reliability.

Production network experience to help new facility

The plant in San Luis Potosi will benefit from experience within the BMW Group production network. Plants Munich and Spartanburg are demonstrating their strengths by helping set up the Mexican facility. The Munich plant will serve as the lead plant for set-up and training, and will train more than 500 Mexican employees by 2019.

BMW Group Training Centre in San Luis Potosi, Mexico

“The training programme for future employees is an important cornerstone for us. The new plant will set international standards with innovative technologies and resource-saving production,” explained Hermann Bohrer, head of the BMW Group Plant San Luis Potosi.

Aiming for growth in the NAFTA region

The BMW Group production network comprises 31 locations in 14 countries on four continents. Mexico is another building block in the BMW Group’s growth strategy. The country is a member of the NAFTA free-trade zone with Canada and the US, and has concluded free-trade agreements with the European Union and MERCOSUR countries, making it easier to export automobiles and import supplier parts.

The Group has marked North America as one of the most important growth markets. The company will invest a total of US$ 1 billion in the expansion of its American plant in Spartanburg by the end of 2016 to achieve a production capacity of 450,000 units. The plant, which specialises in BMW X models, became the largest in the BMW Group production network in 2015. This expansion is in response to strong global demand for X models. The new BMW X7 will be produced in Spartanburg in the future. With Spartanburg and San Luis Potosi, the BMW Group will have full production capacities at key locations in North America.

BMW Group in Mexico

In 2015, the BMW Group sold a total of 17,475 vehicles (12,170 BMW, 5,305 Mini) – an increase of more than 17% over the previous year. Motorcycle sales for the same period reached 2,615 units (+15.2% YoY).