President-elect Donald Trump hits headlines today warning BMW of a 35 percent border tax to be imposed on any car built in their new plant in San Luis Potosi, Mexico. The automaker's latest state-of-the-art plant will produce the next-generation 3-series sedan beginning 2019 and intends to market the rear-wheel-drive vehicles worldwide.
In an interview with Bild, a German newspaper, President-elect Donald Trump warned German carmaker BMW that the United States will put into effect a 35 percent border tax for cars manufactured in the company's new plant in Mexico and exported to the US. Excerpts of Trump's comments were translated into German and released last Sunday, according to HuffingtonPost.
The report indicated that Trump noted that it would be "much better" for BMW to build its new automotive factory in the United States. This news comes on the heels of Trump criticizing automakers GM and Toyota Motor as regards imported vehicles.
Toyota Motor said will build a new plant in Baja, Mexico, to build Corolla cars for U.S. NO WAY! Build plant in U.S. or pay big border tax.
— Donald J. Trump (@realDonaldTrump) January 5, 2017
General Motors is sending Mexican made model of Chevy Cruze to U.S. car dealers-tax free across border. Make in U.S.A.or pay big border tax! — Donald J. Trump (@realDonaldTrump) January 3, 2017
However, as CNBC reported earlier this month, BMW has remained "committed" to the new Mexico plant. In fact, BMW intends to build as many as 150,000 models, including the 3-series. The cars will be sold globally. BMW also said that it plans to build a number of plants across the world as its capacity increases.
While construction of the Mexico facility is still ongoing, the 3-series will still be built in Germany. Meanwhile, the South African plant of the German automaker will instead switch to making the X3 crossover once the factory in Mexico opens.
Mexico has become the car capital of North America. It's growing market has attracted automakers, mainly due to cheap labor rates, liberal trade agreements and its a well-educated workforce. The country has become the growth market for BMW and is home to several plants operated by various automakers.
In other automotive news, Ford Motor recently announced that the production of its $1.6 billion plant in Mexico would be canceled, but the reason behind this is not due to Trump's comments. The market demand was down, so they decided to cancel any plans in Mexico.
BMW's Mexico plant will be the next addition to the 3-series production facilities in China and Germany. The largest of BMW's plant in the United States is located in Spartanburg, South Carolina.
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