Surging demand for gentle vans might have BMW increasing manufacturing south of the border.

BMW is exploring plans to construct its high vendor — the X3 compact crossover — at its underutilized Mexico meeting plant, in response to a manufacturing forecaster who has familiarity with the discussions.

Such a transfer would give the luxurious automaker elbow room at its maxed-out U.S. manufacturing facility to fulfill buyer demand for its whole line of crossovers.

With out revealing particular plans, BMW Group CEO Oliver Zipse mentioned crossover manufacturing will come to Mexico.

“Mexico will play an necessary position in our full setup,” Zipse advised Automotive Information this month. “In some unspecified time in the future in time, you will note X fashions as a result of the market demand is so excessive. That is all I can say proper now.”

BMW’s U.S. crossover gross sales are on a tear. It bought 204,658 X-line automobiles within the U.S. final yr, up 55 % from 5 years earlier. As compared, the general luxurious gentle truck phase grew about 24 % throughout that interval, in response to the Automotive Information Analysis & Information Middle.

Whether or not sourcing the X3 from Mexico would imply having a second North American manufacturing facility line for it, or just relocating the mannequin there, stays unclear.

What’s crystal clear, although, is the mannequin’s market recognition in America. In 2021, the X3 was the highest-selling luxurious compact crossover within the U.S., with file gross sales of 75,858, or 22.5 % of BMW’s complete U.S. gross sales.

The X3’s U.S manufacturing facility, BMW’s largest auto meeting plant globally, is the 7-million-square-foot plant in Greer, S.C., close to Spartanburg. It additionally builds the X4, X5, X6 and X7 utility automobiles, and is a worldwide manufacturing hub for crossovers.

However the plant operated at 96 % utilization in 2021, in response to information from AutoForecast Options. The X3 accounted for about 27 % of its output final yr, in response to AutoForecast.

Shifting its meeting to Mexico might unlock capability within the U.S. to increase manufacturing of different crossovers. Manufacturing of a brand new crossover begins within the fourth quarter of this yr with the XM plug-in hybrid crossover — BMW’s strongest M car, combining a V-8 engine and a high-performance electrical motor to generate as much as 750 hp.

BMW’s $1 billion Mexico operation, a 45-minute drive southeast of San Luis Potosi, builds the compact 2 and three Sequence sedans.

LMC Automotive forecasting chief Jeff Schuster mentioned the manufacturing facility operated at simply 42 % of its 175,000-vehicle capability final yr.

“The plant has practically sufficient area to soak up the present X3 quantity in South Carolina,” mentioned Schuster, who was not conscious of plans to maneuver X3 manufacturing to Mexico.

“It would not require vital funding and retooling to deliver the X3.”

The Mexico manufacturing hub sprawls throughout practically 750 acres, surrounded by miles of dusty scrub land. The manufacturing facility occupies barely 1 / 4 of the location, indicating huge potential for additional growth.

It might match the manufacturing scale of BMW’s South Carolina manufacturing facility, which has the capability to end up 450,000 automobiles a yr.

On the manufacturing facility opening in 2019, Zipse advised Automotive Information, “The scale of the Mexico plant is large enough to succeed in related capability if market demand is there.”

Final yr, BMW invested $125 million in a brand new manufacturing line to construct its 2-Sequence compact sports activities automobile.