BMW to build MINIs in Mexico?

BMW may add MINI output in Mexico.

A new report finds that BMW may use its long-rumored Mexico plant to expand MINI output.

BMW has made it clear in the past that a new North American factory will be necessary to help keep pace with strengthening sales, but the Blue Roundel hasn't decided whether the additional plant will be located in the United States or Mexico.

According to the German newspaper Handelsblatt, Mexico is shaping up to be the leading candidate for the facility, which will reportedly assemble BMW's 1-Series and 3-Series models.

With production capacity at MINI's Oxford, England, plant currently maxed out at 260,000 units, BMW is also said to be considering adding output in Mexico to supplement an upcoming MINI factory in Born, Netherlands.

Building its small models in Mexico instead of importing them from Europe would allow BMW to sidestep the strong Euro, thereby reaping increased profits from what are traditionally the company's lowest-margin vehicles.

BMW is increasing annual production at its Spartanburg, South Carolina, plant by 50 percent to 450,000 units in order to accommodate its X7 three-row crossover. Handelsblatt claims that the proposed Mexico plant would boost BMW's North American capacity to 600,000 units.

A decision on the location of BMW's new North American plant will be reached during the second half of the year, the Handelsblatt report states.

Several of BMW's key rivals already have plans for Mexican production. Audi will start assembly in San Jose Chiapa in 2016, while Mercedes-Benz and Infiniti will commence joint production in Aguascalientes before the end of the decade.

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