BMW Announces €1 Billion Car Plant In Hungary

AUG 7 2018 BY MARK KANE 9

BMW Group intends to strengthen its European production capacity by launching a new car plant near Debrecen, Hungary for both electrified and conventional models.

Europe is still the biggest market for BMW (1.1 million or 45% of total sales) so the additional factory for 150,000 cars annually will be modest expansion. It wasn’t said what models will be produced there yet.

The investment is estimated at €1 billion ($1.17 billion), which more or less is the same the company is spending on the upgrades of plants in Germany to prepare them for electric mobility.

Hungary is an attractive country to BMW because the proximity of battery supplier – Samsung SDI – which opened a battery plant in Goed, 30 kilometers north of Budapest, Hungary.

The target plug-in car sales for BMW Group in 2018 is 140,000.

BMW Group to expand production network 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.”

Harald Krüger, Chairman of the BMW AG Board of Management said:

“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. 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.”

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9 Comments on "BMW Announces €1 Billion Car Plant In Hungary"

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G2

Good work BMW; you’ve a long way to go to catch up to Tesla and Nissan/Renault/Mutsu.

Johan M

Tech wise it seems BMW is ahead of Nissan etc. Obviously far ahead of Tesla. And BMW has the economy to beat them all. Very eager to see what they pack into the iNext, just hope they don’t rush anything, but better take their time. 2021 is still very early days for EVs.

rog

You‘ve forgot two little things:
Battery demand and WLTP with RDE

rog

Get Real

Johan is a German troll who is upset that Tesla tech is kicking ass on the (previously dominant) conservative German high-end cars!

jebise

i dont get it. why would someone now made new investements in conventional car drivetrain?? Where one does know for the EU plans about abandoning conventional motor technology “soon”. Or BMW is part of such strong loby that last will atually “never” happen…? Now that is an interesting think…

antrik

2030 or 2040 isn’t “soon”. The plant will probably be making cars in two or three years, long before BEVs will have a majority share of BMW sales.

Note that BMW has settled on a common architecture for combustion cars and EVs (which is a bad idea IMHO, but that’s what they want to go with) — and this investment seems perfectly in line with that.

John Doe
Just by reading the news I’d guess it has something to do with Donald Trump, and his trade war. BMW is the largest car exporter in the US. . so they sell many cars made in the US, to Europe and China for example. They make about 400K cars in the US, and export about 70% of the cars (to about 140 countries). I think they make one car every minute. Due to the trade war, it is more expensive for BMW to make cars. Since BMW make most of their X models in the US, this gives them problems. They expected more stable business conditions in the US, and did not expect how this situation turned out. When they have invested billions in the US factory (that they’re currently investing even more money in, to make EVs and new X models) it is probably a drag to see the investment become less profitable. They have invested in the factory, schools and their educated workforce that they are very happy with. The BMW suppliers have also made factories close to the BMW plant, and have their own trained workforce. BMWs impact in South Carolina: https://sc.edu/study/colleges_schools/moore/documents/division_of_research/bmw.pdf It’s not like they will… Read more »
Mark.ca

This is exactly why Tesla needs to not set shop in W EU. Even the Germans are going E.

John Doe

That is due to wages, and often tax advantages.

A company I do some work for manufacture hydraulic cylinders in Poland. They did not have to pay taxes for 5 years, the state paid the workers wages during the starting period.
Infrastructure was good too.

The number of people working in a modern car factory are much lower that before.
Price of electricity, taxes, infrastructure, ability to get skilled workers, political stability, work culture. . Many factors to think about.