To get the facility up and running, the company will invest 1 billion euros ($1.17B).
After making investments in the United States, China, and Mexico, the BMW Group is turning its attention towards its most important market: Europe. How important? 1.1 million cars were sold on the old continent last year, representing 45 percent of the group’s sales. Not only that, but January-June 2018 Euro deliveries are up by 1.2 percent over the same period of last year, totalling 560,000 cars.
To satisfy an increasing hunger for BMW Group cars, a new factory will be built near Debrecen in Hungary following an investment of €1 billion (about $1.17B at current exchange rates). Once it will be up and running, the plant will employ more than 1,000 people and will have a maximum annual production capacity of 150,000 cars.
BMW isn’t saying what sort of cars will be built there, but it does specify both conventionally powered and electrified models will be put together on the same assembly line. The company explains Debrecen was chosen as the group’s new manufacturing facility thanks to the well-established infrastructure and also because it’s close to the supplier network. In addition, BMW mentions it will be easier to hire the necessary qualified personnel and promises the new factory will generate additional jobs with suppliers and service providers.
Following Audi, Mercedes, and Suzuki - which all have factories in Hungary - BMW will start construction work at its plant located about 124 miles (200 kilometers) east from country’s capital Budapest in the second half of next year. Once it will be operational, the factory “will set new standards in flexibility, digitalization and productivity,” according to BMW. Last year, the group acquired materials and services worth €1.4B ($1.6B) from its Hungarian partners, so the decision to build the factory near Debrecen was a logical step to take.
German sites are not being neglected considering this year alone the BMW Group is investing in excess of €1B ($1.17B) to get them ready for the electric onslaught.
BMW Group to expand production network in Europe
Munich. The BMW Group continues to expand its production network in Europe, with a new facility to be built in Hungary, close to the town of Debrecen. It will come at an investment of approximately €1 billion, offer capacity of up to 150,000 units a year and create over 1,000 new jobs.
“The BMW Group’s decision to build this new plant reaffirms our perspective for global growth. After significant investments in China, Mexico and the USA, we are now strengthening our activities in Europe to maintain a worldwide balance of production between Asia, America and our home continent,” said Harald Krüger, Chairman of the BMW AG Board of Management. “Europe is the BMW Group’s largest production location. In 2018 alone we are investing more than €1 billion in our German sites to upgrade and prepare them for electric mobility.”
Oliver Zipse, BMW AG Board Member for Production, added: “In the future, every BMW Group plant in Europe will be equipped to produce electrified as well as conventional vehicles. Our new plant in Hungary will also be able to manufacture both combustion and electrified BMW models – all on a single production line. It will bring greater capacity to our worldwide production network. When production commences, the plant will set new standards in flexibility, digitalisation and productivity.”
Europe is the most important market for the BMW Group. In 2017 it accounted for almost 45 percent of all vehicle sales, with 1.1 million units sold. Up to the end of June 2018, the BMW Group grew in many markets across the continent, with vehicle deliveries totalling more than 560,000 units – a year-on-year rise of 1.2 percent.
The latest decision to develop the production network follows the BMW Group’s strategic principle of balanced global growth and represents the next logical step in the implementation of BMW Group Strategy NUMBER ONE > NEXT.
Competitive production site in Europe
Debrecen is the ideal place for the BMW Group to expand its production network. It was chosen primarily for its very good infrastructure, suitable logistics connections and proximity to the established supplier network. The qualified personnel in the local area were another key advantage. Besides the team at the plant itself, numerous jobs will be created with suppliers and service providers, both within the grounds of the new facility and across the local region.
The BMW Group has been operating a representative office in Hungary since 2004 and enjoys long-standing, positive relations with suppliers in the country. Last year materials and services worth €1.4 billion were purchased in Hungary.
The plant in Debrecen will set new standards in digitalisation, sustainability and flexibility. In addition, it will be a technology leader, with innovative solutions for automation, state-of-the-art assistance systems and flexible logistics applications. In keeping with the BMW Group’s principle of the highly flexible production system, the new facility will manufacture conventionally as well as electrically powered vehicles, all on a single production line.