BMW has started construction of a new factory in Mexico, becoming the latest automaker to head south of the border.
The BMW Group’s new facility, estimated to be ready for production in 2019, will be located in San Luis Potosi, an area that’s home to several auto plants from various makers. Construction began Thursday with a groundbreaking ceremony. It will be building the BMW’s best-selling car line, the BMW 3 Series, and is expected to meet a production capacity of up to 150,000 cars per year. The BMW Group is investing around $1 billion in the plant, which is expected to create 1,500 new jobs.
BMW adds to the growing number of automotive jobs that have migrated to Mexico over the past decade. Mexico has seen a 40% increase in auto jobs from 2008 to 2014, according to the Center for Automotive Research. The U.S. has only seen a 15% increase in the same period.
At least 18 auto plants are already in Mexico with several others planned or under construction. More automakers are moving their production to Mexico, seeking lower overall wage costs than the two other members of the North American Free Trade Agreement, Canada or the U.S, can offer.
The plant is envisioned as BMW’s showcase for sustainability. Most of plant’s electricity will come from renewable energy sources on the site. The facility is also expected to have the lowest water consumption per vehicle produced in BMW’s production network. Its paint shop will recycle its water.
