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FRANKFURT
— BMW said on Friday that it would invest $1 billion over the next two
years in its factory in Spartanburg, S.C., which will become its largest
production site.
The
expansion will add 800 jobs in Spartanburg and increase the plant’s
capacity by 50 percent in 2016, BMW said. In addition, the plant will
begin to produce a new, large crossover vehicle.
Expansion
of the plant had been expected, but BMW did not disclose the scope of
its investment until Friday at an event attended by Penny Pritzker, the
secretary of commerce for the United States, and Nikki Haley, governor
of South Carolina.
BMW,
based in Munich, said the decision to expand production in Spartanburg
reflected the importance of the United States market, the company’s
second-largest after China. BMW sold 377,000 vehicles in the United
States last year, or 19 percent of the company’s total.
“At
the BMW Group, we have a golden rule: Production follows the market,”
Norbert Reithofer, the chief executive of BMW, said in Spartanburg,
according to prepared remarks. Mr. Reithofer managed the Spartanburg
operations from 1997 to 2000 and has often said that the optimistic
American attitude he encountered there shaped his management style.
The
Spartanburg plant already produces BMW’s line of X series crossover
vehicles, which combine elements of sedans and S.U.V.s. The new
crossover model produced there will be called the X7, BMW said. It did
not say when production of the X7 would start, but typically it takes
about three years to bring such a vehicle to the assembly line.
BMW also plans also produce a hybrid version of its smaller X5 crossover in Spartanburg “in the near future,” the company said.
The
company’s plans should help American exports, since BMW ships about 70
percent of the vehicles produced in Spartanburg abroad. Germany owes its
status as the world’s third-largest exporter, after China and the
United States, primarily to the car industry. BMW and its German rivals
Mercedes-Benz and Audi dominate the global market for luxury vehicles.
With
the investment, the capacity of the Spartanburg plant will rise to
450,000 vehicles and the work force of 8,000 will grow by 10 percent.
The figure does not include additional jobs that the investment will
generate at suppliers or local businesses.
The
event Friday was BMW’s 20th anniversary of producing cars in the United
States. BMW said it had built 2.6 million vehicles in Spartanburg since
the plant opened in 1994. After the expansion is complete, Spartanburg
will have the largest capacity of BMW’s 28 production facilities around
the world.
BMW still produces more than half its vehicles at plants in Germany, however.
(A version of this article appears in print on March 29, 2014, on page B3 of the New York edition)
23 comments:
At first I thought that it was interesting that BMW would invest so much in the production site in the United States if only 19% on the company’s total sold came from the US. But then I realized it was to help the market in the US as it would add jobs and hopefully help the economy as more people today are glad to purchase an American made car and to help US exports. I did find it interesting as Professor brought it up that a foreign company is planning on improving the US economy. I think this is because they want to stimulate the economy because they see a potential benefit for them in the future.
BMW is a foreign car company originated from Germany. It was interesting to find out that there was a plant existing in South Carolina for decades now selling a big portion of their inventory. I believe BMW has opened up a plant in the USA because it generates more money and easier for people to get a car faster. Even though Germany does ship many of the BMW's to the US, the plant in the US does make it easier. Also I believe adding many new jobs for people help the economy with unemployment rates. Even adding 800 jobs in South Carolina does improve the unemployment rate a bit. By having BMW plants in both Germany as well as the US spreads the word more about their company and generates more and more benefits for them. In reality BMW's can be imported or also exported.
This states that BMW’s golden rule is that the “production follows the market.” I feel that with this economy companies will do anything to sell and make a profit. With that being said if BMW has to ship 70% of their vehicles to America then that is what they will do. It says that Germany is the third-largest exporter in the car industry which shows that BMW has to keep fighting in order to say known to the world and for people to keep buying BMW’s even with the economy being at a low. I feel that if the cars aren’t made where they are sold then they have imported cars.
It makes sense BMW would want to put some time and money into the Spartanburg, S.C. location. The United States being it second largest market, makes it important for them to try and produce some more revenue. In doing so BMW is creating jobs and helping the economy. With "Production follows the market", being BMW's golden rule they have optimism that the money going into this location will bring better things along as well. They plan to produce a hybrid, which is great, and overall the Spartanburg area's economy should pick up as a result. The car factory should produce all kinds of jobs for all different levels of workers.
Whether the X3, assembled in South Carolina, an imported car is hard to say. Germany being BMW's origination, you would say yes, but it is being assembled in the US by Americans. I don't think it matter so much whether it is imported or not. All that matters is the jobs and revenue it is creating for Americans, especially in that Spartanburg area. It is a good thing BMW is doing, and they must be optimistic it will lead to good things for America as a market of theirs in the future.
BMW's are imported cars based soley on the fact that their origination is baseed in Germany. However, BMW does have a plant in South Carolina that for a long time has been producing a huge portion of their inventory and sales. With that being said BMW may be an imported car which does not help our nations economy but the plant based in the U.S does help our economy. The BMW plant in South Carolina helps create jobs for the unemployed and raises the GDP with its sales.
I think it is a good idea to add extra money into the production site. Like it states, it would be creating many, many jobs, that currently we really need at the moment. It will also increase the money flow and I think will benefit the economy as a whole. I think they should continue to do this, and although producing cars is definitely time consuming, it will help in the long run. I do not consider the X3 to be an imported car. Although its origin is outside the United States, the ones being produced in South Carolina are inside the borders of the United States therefore I do not think it should be considered a foreign car. I think this will lead to an incredible future, and I think it is a good thing that they should continue doing this. It also does not really matter whether or not it is an imported car, but if I had to decide I would say it should not be considered an imported car. Since the US and Germany are such big plants, the possibilities are endless and therefore this all around is beneficial is many, many more ways than just the most obvious about money and creating jobs.
BMW is making a smart choice in investing 2 billion dollars to the South Carolina production plant. They are making an expensive yet, interesting investment that will potentially improve the U.S market in great ways. The U.S buying 19% of BMW's total output is impressive. There are many countries in the world that BMW exports cars to and to be a 5th of that is amazing. 800 jobs being produced will also help out our economy and especially the economy of SC.
Now that BMW is conducting their services in the US, I believe it lost it's value of being a "German" vehicle because it's now being put together by an American. The parts are technically still being assembled in Germany but the person who puts it together at the end of the day is a American. People pay more for these cars because they see it as "it's an imported vehicle" "it's price definitely matches up to a lot of the barriers of arriving to the US", but that is no longer the case. Since it is being assembled in a cheap state such as South Carolina, they should reduce pricing since it's no longer a German craftsmanship.
In my opinion, BMW's decision to move a production plant is a positive one for both parties (the US and Germany). First off, the plant in South Carolina will increase job opportunities substantially. It will also increase the amount of exports in the US. This move was a smart one especially because of the size of the United States market. The plant will benefit Germany in many ways such as the fact that it will increase BMW's sales and bring in more revenue to Germany. It will also give BMW an economic advantage over their competitors, Mercedes-Benz and Audi. Overall, I believe the decision to bring a plant to the United States was a good one.
Nolbert Reithofer's moto is, "At the BMW Group, we have a golden rule: Production follows the market”. This is a great choice economically for not only the BMW company but it also is good for America's economy. This is because the 1 billion dollars that BMW is investing in their South Carolina factory will create jobs and will better the American economy, increasing the ability of Americans to purchase BMW's.It especially helps the unemployment rate in South Carolina and also areas that do business with them get a boost in revenue. This helps the company increase production by about 50%.
BMW has decided to expand their American plant located in South Carolina. This decision shows the importance of the American Market. As the article states 19% of BMW’s last year’s sales were made in the United States. BMW is allowing the market to shape their management style and their production. If the company did not see potential in the United States Market they would not be investing billions in their South Carolina plant. The expansion will increase exports. The expansion of the plant will help the economy in other ways as well. Production will increase causing BMW to higher more employees. Not only will BMW have to employ more people, but suppliers and local business affected by the growth of the plant will also have to employ more people to handle the growth. Even though BMW is a German company they are doing a lot to invest in the U.S. Market.
I believe that BMW decision to invest in a production plant in America would is a positive decision to Americas economy, being that to which it was originally produced in Germany. Being that BMW sold an average of 377,000 vehicles in the United States alone, or an average of 19 percent of the company’s total. It would convenient and help boost our economy both in the field of unemployment and also GPD. The article states that “the work force of 8,000 will grow by 10 percent” which does not include the additional jobs created by external vendors and local businesses. In the end I believe the decision of bringing a BMW production plant is good on the Americas side, but will it will eventually devalue the name of BMW being that it isn’t an overseas product, and to some overseas products exudes luxury (that doesn’t mean that the functionality of the car will be different).
-Devendra Mohan
"BMW sold 377,000 vehicles in the United States last year, or 19 percent of the company’s total." In response to these numbers, BMW has decided to invest $1 billion over the next two years in tits factory in Spartanburg, South Carolina, which will eventually become its largest production site.
This is a great step forward for BMW. As well as the increase in revenue that the company will see, there will be new jobs created and a boost in economy. Benefiting both the company and US economy in many ways in the long run. The decision made by BMW is a good one, and the results will be seen in the future.
Any foreign company that opens their business in America is good because they are creating employment for the Americans. They also bring new and different ideas that they share with the Americans. BMW’s investment in SC is commendable. Besides creating job opportunities for the local people, it promotes competition because local vehicle companies will try their best to have their cars as good as BMW. I think the parts are imported then assembled here in the USA. With the new investments they may be able to make the parts in the United States. Mercedes Benz has a similar plant in Birmingham ,Alabama which has helped locals with employment. All these investments help improve US economy.
I think that one of the most important things in this article was that they said "production follows the market." This is key in business because without the market there would be nothing to produce. The market dominates what is prodcued and BMW values the market and listen to what they want. I think that opening a plant in the United States is a very good idea. This will not only give 800 people jobs, but it has the potential to give the economy a huge boost and maybe even raise sales for BMW. Since 800 more people will have jobs, those people will have more money to put back into the economy. Also I think that BMW could benefit from this because I think that more people will be willing to buy the cars if they are made in the USA. Also BMW will eliminate the process and costs of shipping the cars across seas and therefore that could potentially lower the costs of these luxury cars. Overall, I think that opening the plant in the US will not only help sales for BMW, but also boost the US economy greatly.
It is nice to see a foreign car manufacturer such as BMW from Germany creating US jobs and also increasing US exports by expanding their plant in Spartanburg, South Caroline. Of course it helps the market and the economy by giving people more jobs and making the cars cheaper because they are build here in America. However, we can not forget that since it is foreigner, all its profit go to other country, America does not gain much out of it; it may only gain with the consequences of the rise of the capacity and work force. BMW is not trying to help America's economy but instead its investment towards production is only following the market, and the United States market reflects 19% of the company's total of vehicles sold last year.
I think it is a smart idea that BMW is focusing their attention toward the U.S market. As it says in the article, "Production follows the market." and the United States has a market full of potential. It is also good to see that producing these cars here helps create jobs for Americans and increase exports. On the other hand, we have to realize that since BMW is foreign, all of the money they earn goes back with them. Let's not forget that the sole purpose of BMW producing vehicles and selling them in the U.S is so they can maximize their profits. As they mentioned in the article, the U.S has the second largest car industry in the world and BMW is looking to fully exploit that to their advantage.
The economy being at a low has hurt the BMW company. 19% of BMW production is on US territory while the rest is over seas. Although this is helping the economy here by creating new jobs, BMW is loosing credibility in Germany, while its competitors are taking over. BMW will do anything to make a profit which includes them fighting to stay known and credible in the car making industry.
The economy being at a low has hurt the BMW company. 19% of BMW production is on US territory while the rest is over seas. Although this is helping the economy here by creating new jobs, BMW is loosing credibility in Germany, while its competitors are taking over. BMW will do anything to make a profit which includes them fighting to stay known and credible in the car making industry.
BMW is a German car company that has expanded to the United States. BMW has moved 19% of the company's total production to South Carolina in the United States. People may ask why do this? But the answer is simple. It is low costing to the Germans and high reward. Many Americans are hooked on the fact of an "american" car and now finding out that most the BMW in the US are made here the company expands. Germany still makes a fortune in revenue from BMW and also creates an allie in the United States. The United States will appreciate BMW in South Carolina because it increases employment and also can make a huge car industry have exports from the United States than paying for Imports of the product.
BMW is a foreign company which was made in Germany. They are one of the most wanted cars by people today. It did amaze me how they put so much money into investing their cars in America and they don't get many sells here percentage wise. This shows that they are really trying to expand their product all over the world. The BMW company are helping the unemployment rate by adding 800 jobs to south carolina which is an enormous number at one time. I believe that BMW is investing their money into the U.S. because they know they can generate a lot of money over here but by doing so they figured out that if we help people get more jobs then people would have more money to buy BMW's
Most luxury automobiles are imported from other countries and seen all around the United States. Especially in New York City, where on every other street there is a imported car whether it is luxury or not from top companies : BMW, Audi, and Mercedes Benz. Just as the company promotes, "production follows the market", even if the cars are being made and developed in United States, they are branded as luxury cars from Germany and will be continued to be called "imports" as the other competitors from around the world will be called as well. This move by BMW to "out source" maybe to the United States to develop and sell their product may be a smart move or even cheaper move to cut exporting costs of selling their produce within the US. BMW will always be called an import car.
A German production company situated in the United States sounds like a good idea especially if it can give people who are out of work an opportunity to get back on their feet. Not only will it provide new job opportunities but it will also allow the U.S to make profit off the cars produced here and export them to other countries overseas.
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