4 states compete for new BMW plant

BMW already has a foot in the Mexican manufacturing environment, but it is in talks with multiple states for its latest investment. In August, Reforma reported Ludwig Willisch, CEO of BMW for North America, said the company was in the preliminary negotiations stage with several local Mexican governments about building a new maquiladora. According to El Informador, the latest news on the investment developments is that Guanajuato, Queretaro, San Luis Potosi and Hidalgo are competing to win the contract. El Financiero reported BMW wants to be on track to receive $2 billion in services from Mexican suppliers by 2015, which is a 22.5 percent increase from what the company already purchases. Manufacturing in Mexico has remained strong throughout 2013, with Bloomberg reporting auto output in Mexico alone increased 4.4 percent in the first eight months of the year. According to Bloomberg, just one more BMW plant would help to drive higher exports from the Mexican auto industry.

"Investors are confident of Mexico's future, regardless of the slowdown in the first semester," Mexican Economy Minister Ildefonso Guajardo told Bloomberg regarding Mexico's recent automotive output and ongoing talks between BMW and Mexican local governments. "There is a lot of trust in the future of the Mexican economy."

The additional BMW maquiladora may even accelerate many foreign investors to offshore manufacturing to the country by showcasing that one of the globe's biggest automotive companies is invested in producing products in the country.

Ongoing talks
According to El Informador, each of the four states competing for BMW's newest maquiladora must pass BMW's more than 300 indicators. Being able to check off each of BMW's requirements for the maquiladora will make or break which state receives the investment. El Informador reported states will need to pass indicators in multiple categories, from services to highway connection to even the trained workforce.

Hidalgo was included in the negotiations at the final state, the news source reported. Construction is set to begin at the plant in 2014, making it imperative that BMW finalizes its choice of location.

While Queretaro is a long established industry cluster, expanding its automotive manufacturing strength has been in the works for Guanajuato. According to El Financiero, Guanajuato became one of the leaders for the BMW investment after government officials from the state met with BMW executives in Germany recently. No matter which state BMW picks, Reforma wrote the additional maquiladora has been a long time coming for BMW.