BMW to shift some SUV production overseas in response to tariffs

Irving Hamilton
July 11, 2018

The BMW Group and its partner Brilliance Automotive Group Holdings signed a long-term framework agreement to further expand their joint venture BMW Brilliance Automotive (BBA). The company started producing its X3 sports utility vehicle in China in May, and also plans to make the iX3 electric SUV there starting in 2020 that will be sold on the local market as well as for export.

In addition to moving production, BMW will increase prices in China on vehicles imported from the US because it is "not in a position to completely absorb the tariff increases" imposed by China.

"Our agreement sets a long-term framework for our future in China - a future involving continued investment, further growth and a clear commitment to the development and production of electric vehicles", BMW CEO Harald Krueger said in the statement. The next chapter of our cooperation has the potential to go beyond our existing motto: in China, for China.

China is BMW's biggest market, with around 560 000 units sold past year, which is more than its next two markets - the USA and Germany -combined.

Auto brands in China are required to make electric vehicles at least 10 percent of their sales starting next year or buy credits from competitors that exceed their quotas. BMW makes the X3, X4, X5, and X6 in SC, where it employs 10,000 people.

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Sales of pure-electric passenger vehicles in China rose 82 percent a year ago to 468 000, according to an industry group, the China Association of Automobile Manufacturers.

Local production of the BMW iX3, the first all-electric core model of the BMW brand, will start in 2020 in Shenyang. BMW has also developed the iX3's powertrain to not use any rare earth metals.

The production vehicle will be inspired by the Mini Electric Concept that was revealed at last year's Frankfurt Motor Show and will be sold in various markets around the globe.

Powering the Concept iX3 is an electric powertrain delivering 270 HP that utilizes a 70 kWh battery. Plus, the fifth-generation electric drive system also includes new and more powerful batteries.

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