BMW AG formally opened a factory in Mexico to make its best-selling 3 Series sedans for North American market and more than 40 other markets worldwide.
The $1 billion facility in San Luis Potosi will employ 2,500 people and has capacity to make 175,000 vehicles per year. BMW says the plant was designed to respond quickly and flexibly to shifting volumes and new model variants.
BMW notes that Mexico, a signatory for the updated version of the 25-year-old North American Free Trade Agreement, also has free trade deals other major markets, including the European Union and South America’s MERCOSUR trade bloc.
LMC Automotive estimates that the 5% tariff the Trump administration threatens to impose on Monday for all goods from Mexico would hike the retail cost of a car made at San Luis Potosi by at least $2,000.
If the tax rises to 2% by October as Trump warns, the cost would surge to $10,000 or more, enough to shut down the plant. the global automotive forecasting service says.
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