BMW plans to invest KRW43bn (US$35m) to expand its logistics operations and driving centre in South Korea, as it looks to regain consumer confidence and improve the brand's image in the country following last year's damaging recall.
BMW said it will invest an additional KRW30bn (US$25bn) in its Regional Distribution Center in Anseong, some 80 km south of Seoul, which was completed in 2017 at a cost of KRW130bn (US$107bn).
Go deeper with GlobalData
The company said it will also invest an additional KRW13bn (US$11m) in the Driving Center in Incheon to better serve local consumers. The original investment of KRW77bn (US$63m) was also completed in 2017.
Incheon, just west of the capital city Soeul, is also the location of BMW's flagship dealership, the Bavarian Songdo Complex, which is the largest worldwide in terms of land size and cost KRW50bn (US$41bn) to build.
BMW recalled some 171,000 mostly 5-series diesel models due to the risk of engine fire, which was blamed on a faulty exhaust gas recirculation (EGR) and related parts that were sourced locally. The recall followed more than 40 widely-reported incidents of engine fires on the country roads.
BMW was also criticized at the time for its delay in dealing with the problem and this has also affected the brand's image in the country. In the first seven months of 2019 its South Korean sales were down by 44% at 21,721 units, while its Mini sales were up by 2% at 5,310 units.
US Tariffs are shifting - will you react or anticipate?
Don’t let policy changes catch you off guard. Stay proactive with real-time data and expert analysis.
By GlobalDataBMW Korea Group CEO Han Sang-yun said in the statement his company intends to "strengthen customer-oriented services and continue to make investments in its local facilities based on 'lessons' learnt from a crisis".
