BMWs Spartanburg factory was BMW’s first full manufacturing facility outside Germany. It currently makes X3, X5 and X6. The X4 and X7 are on the way.

BMW's Spartanburg factory was BMW’s first full manufacturing facility outside Germany. It currently makes X3, X5 and X6. The X4 and X7 are on the way.

BMW's biggest plant in the world is going to be the Spartanburg facility in the US.

Production capacity there will be ramped up to 450,000 vehicles a year. It really is quite astonishing when you think about it: BMW's biggest manufacturing facility will be in the US and not in Germany. Two things are at work here. One is the barnstorming success of BMW's 'X' SUVs and the fact that the biggest market for them is in North America. Build them where you sell them is a sensible policy on a number of grounds, not least as a form of 'natural hedging' to counter exchange rate risks.

Does it matter to the customers for these BMWs around the world that they were made in South Carolina and not in deepest Germany? Basically, no, because the brand is still perceived as imbued with the usual core values (solid Teutonic engineering etc) irrespective of where the cars are actually finally assembled. The thing is to keep the balance right. Enough BMW cars are made in Germany for BMW to be seen as pretty German. And BMW systems and processes govern the company's output wherever it is. A BMW is a BMW, whether it's an X5 out of Spartanburg or a 3-Series out of Regensburg. The BMW DNA is obvious. 

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I guess the rise and rise of Spartanburg must raise some questions in Germany. Would the labour unions be concerned? They must be keeping an eye on things but they will be more concerned about the 'core' models (3-, 5- and 7-Series) and what's happening there, as well as the overall investment picture for BMW in Germany. In this respect, BMW is - like other German OEMs - perhaps playing a cute game. Relatively high costs in Germany mean that we have to invest overseas, where demand is growing fast, the car companies say. That will be essential and healthy for the company's future. But we will retain as much activity as possible in Germany.

The figures support the car companies. The German auto industry trade association VDA expects that 2014 will see growth in passenger car production in Germany of 2% to 5.55m units. Passenger car exports, VDA forecasts, will also rise by 2% in 2014 to 4.28m units. So, around three quarters of cars built in Germany this year will be exported. A 'hollowing out' of Germany's auto industry appears not to be in prospect. The overseas stuff must be incremental growth then, with plenty of SUVs for new customers in North America or knocked down assembly of exported kits in some places. Much of the manufacturing value-added for the company's output is still retained in Germany.

There is also no shortage of evidence of investment by BMW in its home country. As BMW eyes overall car sales of 2m this year, a deft balance is being struck in terms of where to invest to have the right global manufacturing footprint for the future.

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