BMW is reportedly considering a second US manufacturing plant that would produce engines and transmissions, according to remarks attributed to its CEO.
BMW Group CEO Harald Krueger was speaking to Reuters at the LA auto show and ahead of a possible raising of tariffs on European car imports to the US by the Trump administration.
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BMW has a US vehicle assembly plant, at Spartanburg in South Carolina, and is considering changes to its current scheme of importing engines and transmissions, the report said. Engines, in particular, are a high value added component that is currently shipped by BMW to the US from Europe.
"We're at the range where you could think about a second location" in the US, he said, according to Reuters. He also pointed out that another factory would provide a natural currency hedge for BMW, which uses the Spartanburg plant as a global manufacturing source for SUVs.
BMW has been keen to emphasise that the South Carolina plant is the single largest exporter of automobiles by value in the US. Since the introduction of the original X5, two of every three vehicles produced were exported for sale outside the US. When considering the Spartanburg-built X3, X4, X5, and X6 together, over 70% of annual production is exported.
Spartanburg's workforce has also grown from an initial 500 people in 1994 to around 10,000 today with another 1,000 expected to join by 2021.
BMW has already been hit by higher tariffs in China applying to US shipments of vehicles from Spartanburg – a move that followed the imposition of higher US tariffs on Chinese goods as part of Trump's more assertive policy of 'economic nationalism' that addresses US trade concerns.
Donald Trump has also threatened to slap 20% tariffs on cars imported from the EU as trade tensions with the EU also threaten to escalate into a 'tit-for-tat' trade war. Earlier this year, he appeared to single out German premium carmakers when he reportedly said he would pursue German carmakers until there were no Mercedes-Benz rolling down New York's Fifth Avenue.
