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The manufacture of sport utility vehicles in Europe would help protect the company from the ever-increasing business tensions affecting its factory in the United States
BMW AG will build its first plant in Europe in nearly twenty years to strengthen its presence near House, while a growing protectionist environment increases the cost of exporting cars around the world.
The automaker will invest 1,000 million euros ($ 1,170 million) in a new badembly plant in Hungary, which will produce 150,000 vehicles. year, according to a statement released Tuesday. It will be the first BMW installation to make cars in the region since 2000, when it built one in Leipzig, a spokesman said.
Like other global automakers, BMW is under pressure to adapt to changes. global trade policies that undermine decades of action to reduce barriers. Depending on the type of cars that the company sets up in Hungary, the plant could help offset the increasing risks. The manufacture of sport utility vehicles (SUVs) in Europe would help protect BMW from the ever-increasing business tensions affecting its factory in the United States. With that, he could also gain flexibility to counter interruptions in the flow of urban Mini-manufactured cars in Oxford, England to the European Union after Brexit.
"This seems like a decision motivated by risk minimization and cost optimization," said Jürgen Pieper, an badyst at Bankhaus Metzler in Frankfurt. "Western Europe is very expensive, Mexico and the United Kingdom are at risk of tariffs and the factory in the US It is already huge."
Threats
BMW stated that it was not planning to manufacture Mini in Hungary and did not want to specify which models it will manufacture in the new location. The company exports most of its popular SUVs from its plant in Spartanburg, South Carolina, to Europe, a strategy that could be further hampered if pricing threats become a reality. The company has chosen Hungary as a new production site despite the fact that sales of BMW and Mini cars in Europe have only increased by 1.2% in the first half, less than in other countries.
"We are now strengthening our operations in Europe In a statement, BMW CEO Harald Krüger said:" The construction of the construction of the city of Debrecen, about 200 kilometers to the east of Budapest, will start the second half of 2019.
Choose Hungary as a new production site, adding it to 31 manufacturing and badembly sites worldwide, makes the automotive industry of luxury the fifth largest automobile to produce in this region. Central European countries. The other four are Daimler AG; Audi, the brand of Volkswagen AG; the French group PSA and Suzuki Motor Corp. The production of these companies reached 8.08 billion Hungarian forints (29.450 million USD) last year, or nearly 21% of the economic product, according to official data.
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