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      10-16-2010, 05:40 PM   #1
Jason
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Lightbulb BMW May Build Fourth Model in US - Possibly 3-Series Sedan

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BMW is considering adding a 4th model to be produced at the Spartanburg, S. Carolina plant, to further compete with Lexus and Mercedes in the U.S. The 3-series (perhaps starting with the next generation F30/F32 3-series) may wind up being that extra model, given its high volume and Mercedes' announcement last year that its Alabama factory would also begin building its C-Class.

BMW has just completed a $750 million expansion of the Spartanburg plant to make room for the all new X3, which will join the X5 and X6 as the 3 models currently being produced at Spartanburg. An additional "volume" model for the U.S., could be added in South Carolina, said Frank-Peter Arndt, BMW's production chief. The introduction of a fourth model would help reduce BMW's exposure to foreign currency, which presently tops US$14 billion.

IHS Automotive analyst Rebecca Lindland believes the 3-series is the most likely candidate for production at Spartanburg: "The 3-Series is a no-brainer." she said.

For U.S. customers, this could possibly mean reduced waiting times for custom ordered 3-series in the future. Currently, approximately 70% of the vehicles built in Spartanburg are exported.

Source: Bloomberg

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      10-16-2010, 06:05 PM   #2
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Does that mean the cost of a 3 series will drop?

and


Would you board members interpret a US made 3 series as being of inferior quality to a German made one?
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      10-16-2010, 06:13 PM   #3
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Quote:
Originally Posted by TheStigsTwin View Post
Would you board members interpret a US made 3 series as being of inferior quality to a German made one?
Why should we? Before the BMW "SAVs" became a necessity for so many Americans, the Spartanburg plant made only the Z3 & Z4. I had one of each and the quality was similar to my German made E46, E88 and E91 BMWs.

Are you saying that because something is made in America, it's quality is automatically suspect?

Tom
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      10-16-2010, 06:51 PM   #4
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I have a 3 series built in South Africa, the the last one was built in Liepzig - the quality is almost identical, in fact, the SA car fit/finish may actally be a bit better. Even Toyota and Honda build a bad one occasionally - we had an ES350 lexus that had all sorts of issues.

I think it's more of what QA system the mfg uses than the nationality of the workers used to assemble the cars. Even UAW built cars have improved significantly in quality, we're a long ways from the build quality of the 70's that got folks flocking to Honda and Toyota.

I'd buy a NA built 3 series without question, would probably go pick it up over at the factory.
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      10-16-2010, 06:54 PM   #5
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Quote:
Originally Posted by Tom K. View Post
Why should we? Before the BMW "SAVs" became a necessity for so many Americans, the Spartanburg plant made only the Z3 & Z4. I had one of each and the quality was similar to my German made E46, E88 and E91 BMWs.

Are you saying that because something is made in America, it's quality is automatically suspect?

Tom
I'd don't blame one for thinking that, given the bad reputation American car manufacturers have gotten in the past. however i would also remind that person that we're not talking about an American car manufacturer of the mid-90s. this is a German automaker that fully understands how the industry works, and would never let it's highest volume car be subjected to poor build quality. I think this is great for the 3-series, great for BMW's presence in the US, and most important, great for our economy.
The way I see it, if that plant is going to be producing all the 3-series for North America, they are going to need many workers for those assembly lines. This plant could potentially mean alot more jobs. I think this is great.
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      10-16-2010, 06:55 PM   #6
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Originally Posted by TheStigsTwin View Post
Does that mean the cost of a 3 series will drop?
No, BMW (like any brand) prices their cars 'competitively' for any given market. Actually, BMW's profit on the US market is a bit on the low side.


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      10-16-2010, 07:23 PM   #7
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No, BMW (like any brand) prices their cars 'competitively' for any given market. Actually, BMW's profit on the US market is a bit on the low side.


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Good point, but there is a lot more pricing pressure out there these days. The new 5-series and new X3 have both been priced at lower prices than the outgoing models in addition to having more standard equipment in response to aggressive pricing on the new MB E-class and GLK, plus Audi's growing market share.

If BMW decides to manufacture the next 3-series sedan in the US, they would be able to do the same and make the entry-level 3-series models more competitively priced. I'd say that there's actually a pretty good chance of this happening. They clearly can not meet all US demand with US production, but they could produce a good portion of what is needed of their volume-leading and most price-sensitive models -- 328i and 328xi sedans (or whatever the equivalent model is on the next generation).
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      10-16-2010, 07:30 PM   #8
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Quote:
Originally Posted by TheStigsTwin View Post
Does that mean the cost of a 3 series will drop?

and


Would you board members interpret a US made 3 series as being of inferior quality to a German made one?
Some of the most highly rated vehicles for reliability sold in the US are also assembled in the US. Honda and Toyota specifically have all sorts of manufacturing and assembly sprinkled around the country.

In addition, any halfway decent manufacturing company is going to have have standards, methods, and procedures replicated across every facility to ensure identical production. They're not going to reinvent the 3 series production line from scratch, they're going to copy what they've got.

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      10-16-2010, 07:34 PM   #9
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what might this mean for ED of a future 3-series?

also, should we speculate that if indeed the 3-series will be the 4th model produced in Spatanberg, that it would make sense to begin with the F30? or would there even be time between now and then to ramp up for production of the F30 in 2012?
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      10-16-2010, 07:39 PM   #10
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Quote:
Originally Posted by TheStigsTwin View Post
Would you board members interpret a US made 3 series as being of inferior quality to a German made one?
yes
look no further than the quality difference between the VW Golf (Mexican) and the GTi (German)
i don't think anyone can make cars better than the germans
and i don't mean german design and american labour
i mean german everything
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      10-16-2010, 07:40 PM   #11
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This would mean one bad thing for a potential 3 series buyer...

NO EUROPEAN DELIEVERY!!!!

This would definetly put off a lot of people to buying one unless they were able to still do an ED. Plus it would cost a bit more money.
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      10-16-2010, 07:45 PM   #12
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My X6 build quality is perfect. i hope they build em here. Trying to insulate themselves from currency movements. Good for everyone.
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      10-16-2010, 07:57 PM   #13
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I don't know about this...my Z4M was built like a rattle box..
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      10-16-2010, 08:24 PM   #14
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I guess they are expecting USD to remain weak for quite some time?
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      10-16-2010, 08:35 PM   #15
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Quote:
Originally Posted by sq86 View Post
This would mean one bad thing for a potential 3 series buyer...

NO EUROPEAN DELIEVERY!!!!

This would definetly put off a lot of people to buying one unless they were able to still do an ED. Plus it would cost a bit more money.
They're not moving all 3-series production to the US, so in theory it should still be possible to do ED on a 3er.

That said, BMW still might drop ED on a 3, but I kinda doubt it. The savings involved might not be as much as they are now.

In fact, I might be tempted to buy a ED 3 just to make sure I get a German-made one.
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      10-16-2010, 08:42 PM   #16
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1-Series for sure!
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      10-16-2010, 08:58 PM   #17
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Quote:
Originally Posted by Tom K. View Post
Why should we? Before the BMW "SAVs" became a necessity for so many Americans, the Spartanburg plant made only the Z3 & Z4. I had one of each and the quality was similar to my German made E46, E88 and E91 BMWs.

Are you saying that because something is made in America, it's quality is automatically suspect?

Tom
there may not be a sacrifice to ability to put the car together, however, the quality of german metals vs us metals are known to be a bit stronger and higher quality in germany. it's the same worksmanship process going into the production, however, they wouldnt waste money by importing the german steel to the us for production. for those of us who only keep cars around half a decade at most theres probably 0 noticeable difference. the long gevity of the car may be a smidge less but likely not anything the first or even second owner would experience.
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      10-16-2010, 09:07 PM   #18
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Quote:
Originally Posted by Tom K. View Post
Why should we? Before the BMW "SAVs" became a necessity for so many Americans, the Spartanburg plant made only the Z3 & Z4. I had one of each and the quality was similar to my German made E46, E88 and E91 BMWs.

Are you saying that because something is made in America, it's quality is automatically suspect?

Tom
I didn't actually state anything, I just was curious what some of the board members would think.
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      10-16-2010, 09:17 PM   #19
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I didn't actually state anything, I just was curious what some of the board members would think.
If they bring 3 to stateside, I think next gen M3 would still be built in Germany?
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      10-16-2010, 09:32 PM   #20
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Quote:
Originally Posted by kmarei View Post
yes
look no further than the quality difference between the VW Golf (Mexican) and the GTi (German)
i don't think anyone can make cars better than the germans
and i don't mean german design and american labour
i mean german everything
So how do you explain HPF failures on N54 motors? How do you explain mass rear upper strut mount tower failure on E36 and E46 cars? These are small amount of failures of many that I can think of.
I've owned an MKII GTI 16V that was "assembled" in mexico, E36 M3, E46 Zhp, and currently an MKV jetta.
I hate to tell you this but quality is not dependent on the "country" of manufacturing; rather, it is dependent on the product quality, employee training, and management.
Take my MKV jetta for instance; comparing it to MKII and MKIII GOLF, and JETTA, MKV Jetta surpasses quality and build craftsmanship. Why? Maybe VW began to realize that competition has caught up to them. Maybe VW realized that "hey, if we have to compete on a global level we need to up our quality". Maybe VW began feeling the heat from the Japanese automakers.
Pay attention to what happened to Mercedes Benz when they decided to "merge" with Dodge/Chrysler. They thought that building a car inexpensively would add to bottom-line profit. Wrong! Quality began to slip dramatically. MB began using "inexpensive" material to build their vehicles.
BMW is facing many dilemmas-the rising cost of labor in Germany, Global competition, and the devaluation of the dollar vs the rise of the Euro currency. Don't discount the fact that purchasing materials have also increased in price.
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      10-16-2010, 09:44 PM   #21
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Quote:
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Does that mean the cost of a 3 series will drop?

and


Would you board members interpret a US made 3 series as being of inferior quality to a German made one?
It would drop significantly in Canada for sure as the 6.1% import duty that is imposed on vehicles made outside of Canada/USA/Mexico would be dropped as per NAFTA.

I assume a similar tax is imposed in the USA.

Custom ordering would be simplified and orders could be delivered quicker and factory delivery would be more widely embraced.

This would also create additional jobs in the area and help to boost an ever declining economy. This sounds like a great opportunity for BMW and North America as a whole. Mercedes as well, look for Audi to follow suit and setup shop too or move more Audi production to Mexico.
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      10-16-2010, 10:01 PM   #22
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I still think it's for financial reasons. BMW can balance its raw material cost better with sale price. If they buy raw material in euro and receive sales in
Usd they will be hit hard with currency fluctuation, unless they raise US msrp significantly.

What I want to know is how german government will react given it's a export economy, moving 3 series production abroad must have a significant reduction to GDP
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