BMW banking on Mexico to cut costs as demand jumps

bmw-logoThe world’s largest luxury carmaker based in Munich, BMW Group, today announced plans to increase purchases from Mexico in a bid to lower total costs under a new cost cutting program.

More specifically, BMW will buy more auto parts that are manufactured in Mexico for its vehicles that are assembled around the world, particularly in Germany and the United States.

BMW said it would more than double auto part purchases from Mexico over the next few years, starting two years from now.

The company purchased USD $615-million in auto parts from Mexico in fiscal 2009, and now plans to increase that number to up to $2.4-billion annually.

BMW hopes that purchasing the less costly Mexican auto parts will save the company millions and would also serve as a hedge to currency risk, which is expected to save the company more than $1.3-million in currency losses alone.

The company also expressed plans to increase purchases from Canada and the United States, and not only Mexico, mainly to serve as a hedge to currency risk exposure.

Demand is very strong for BMW vehicles, and saving even marginal sums on a per unit basis by purchasing from Mexico could result in material fiscal savings.

In the United States, BMW has about a 20-percent market share of all vehicles sold in the country.

Most recently, last May, BMW Group reported an important 10.8-percent increase in total sales year-over-year, which includes increases in sales for all BMW brands, including BMW, and Mini.

In the month before (April), aggregate sales increased 14.6-percent to 116,391 vehicles sold over the same period in the last year.

The BMW stock (ETR:BMW) is trading up 0.41-percent to $40.06 per share in after hours trading as at 10:05pm New York time.


tag TAGS: , ,
Short URL: http://business2press.com?p=6884
Recommended:
b2p Ensure that you follow us on Twitter and Like us on Facebook
Peggy holds a Bachelor Arts degree with honors in Economics from York University in Toronto, Canada. She is a Certified Management Accountant (CMA). She has also passed Level I of the Chartered Financial Analyst (CFA) Program. She is also a realtor. Write to peggy@business2press.com
checkmark
We are perfectly committed to the highest ethical and professional codes of conduct and standards in the industry on a firm wide basis. Learn more about us, our contributors, and our governance
b2p
We encourage you to comment. Comments are moderated. Comments that are abusive, off-topic, have marginal substance, or include promotional content will be removed. We cannot facilitate requests to edit or remove comments, or explain moderation decisions
  • RayCee

    In the United States, BMW has about a 20-percent market share of all vehicles sold in the country.

    Really…..

  • http://www.squidoo.com/moulicohen Mouli Cohen

    I can't believe the data in the post. They must do something about it to increase the market share.

  • http://www.germancarenthusiast.com/sell-it/bmw/bmw-5-series 525xi

    20%, I don't think it's that high.

    • Dimi

      it is, 1 in 5 cars are BMWs

  • Dimi

    it is, 1 in 5 cars are BMWs

  • http://www.automotix.com/ Automotive Parts

    Hi,

    BMW is really world’s biggest car maker company, which has manufactured numbers of luxury models, really thanks guys for information about that BMW banking on Mexico to cut costs as demand jumps.

    Thanks guys for this big information.

  • http://www.automotix.com/ Automotive Parts

    Hi,

    BMW is really world’s biggest car maker company, which has manufactured numbers of luxury models, really thanks guys for information about that BMW banking on Mexico to cut costs as demand jumps.

    Thanks guys for this big information.

Business 2.0 Press publishes exclusive business tech news and analysis covering start-ups to large-caps from Bay & Wall streets since 2008 from a group of highly knowledgeable industry professionals that abide by the toughest industry codes of conduct and professional standards lightMore

lightAdd value by subscribing (RSS)

logo

StockFractions.com has the most stock ratios for public companies. Get the most comprehensive micro insight on public firms available on the web, all for free.
Stock Fractionsgo

title

Colon cancer is one of the leading causes of death. Irrespective of family history, everyone is exposed to the risk. About 90% of colon cancer cases begin from non-cancerous tumors, polyps, which could form in the large bowel. Screening with a colonoscopy will painlessly remove any polyps hence almost entirely reducing your risk of developing the horrible disease. The good news is that about 90% of colon cancer cases are preventable through a simple (yes, simple) colonoscopy.
Learn moreatom
Public service message from Business 2.0 Press