German car manufacturer BMW is to invest $1 billion in building a state of the art factory in Mexico.
The new plant in the state of San Luis Potosi will be BMW’s second in North America once production begins in 2019.
It should be able to produce 150,000 vehicles a year, bringing the total amount of cars made in the region to around 600,000, nearly a third of the sales target for 2014.
Mexico has become a new hotbed for automotive manufacturing, largely because wage levels are roughly 20 percent lower than across the border in the United States.
Daimler’s Mercedes-Benz will start joint production in 2017 with Nissan Motor’s upscale Infiniti unit in Aguascalientes. Volkswagen’s Audi division will begin assembling vehicles in San Jose Chiapa in 2016. General Motors has been building cars in San Luis Potosi since 2008.
Car production in Mexico leapt by 7.2 percent during the first part of 2014, with 1.31 million vehicles being made in the months January to May. Last year was a record-breaking year with numbers reaching 2.93 million.
Free trade agreements with the US, Latin America and Europe are key factors in facilitating the upsurge in foreign interest in the country.
Rumours are being circulated about which BMW models will be built at the new plant with the company yet to decide.