BMW AG will invest $1 billion to build a plant in San Luis Potosi Mexico that will produce the next generation of its 3-series sedan beginning in 2019. Annual output for the plant is projected to be 150,000 units.
The BMW move follows other European automakers that are taking advantage of lower labor costs, an expanding network of suppliers and the benefit of free trade agreements in Mexico.
In exchange for making a commitment to generate 1,500 new jobs and invest $1 billion by 2024, media reports maintain that BMW will receive $236 million in local aid. Under the terms of the deal, Mexican officials have confirmed that BMW will not be required to remit state and local taxes for a period of 10 years.
To be located on a 300-acre site, the BMW plant will include body, paint and assembly shops. Engines and transmissions for vehicles manufactured at the facility will be imported from Germany.