BMW North American CEO on increasing production at South Carolina plant
Short Summary:
BMW's North American CEO discusses increased production at the South Carolina plant, driven by growing demand for luxury SUVs. The expansion includes the X3M, X4M, and X7 models. Concerns are raised regarding potential tariffs on European vehicles imported to the US, which could negatively impact sales. Despite some hand-wringing about a slowing Chinese economy, exports from the Spartanburg plant to China remain strong. The CEO expresses optimism about the US economy and BMW's growth in 2019, citing a strong product lineup as a key driver.
Detailed Summary:
The interview centers on BMW's increased production at its Spartanburg, South Carolina plant and the broader economic factors influencing the company.
Section 1: Increased Production in South Carolina: The CEO announces a record production level exceeding 400,000 units for the Spartanburg plant in 2019. This increase is attributed to the growing popularity of luxury SUVs in the US market, with the X3M, X4M, and X7 models playing a significant role. The X7's launch this month is highlighted, emphasizing its entry into a competitive but growing segment of large premium SUVs. The CEO states, "the total SUV market is growing and growing and growing on the premium side it's now 50 nearly 60 percent now."
Section 2: Potential Tariffs on Imported Vehicles: The interview addresses the US Commerce Department's investigation into European autos and the potential for tariffs. The CEO expresses concern, stating that tariffs would negatively impact consumers, dealers, and the overall economy. While acknowledging internal analysis of potential sales impacts (a 20% tariff could slow sales by an unspecified percentage), he avoids providing specific numbers due to the uncertainty of the situation. He emphasizes, "if terrace goes up it's not good for the consumer it's not good for our dealer network it's not good for the economy in total."
Section 3: The Chinese Market: The discussion shifts to the Chinese market, a major export destination for BMW. While acknowledging concerns about a potential slowdown in the Chinese economy, the CEO notes that exports from Spartanburg to China remain strong. He attributes any slowdown in overall sales to the shift towards local production of the X3 in China, a decision made prior to any tariff concerns. He carefully avoids making predictions about the Chinese economy, stating, "I'm not an expert for China and I don't want to comment on China."
Section 4: Outlook for the US Economy and BMW in 2019: The interview concludes with the CEO's outlook for the US economy and BMW's performance in 2019. He forecasts slight growth for both the overall market and BMW specifically, citing the launch of several new models (3-series, X7, X3, X5, Z4, and 8 Series) as key factors contributing to this positive outlook. He uses the phrase "firework" to describe the impact of these new products.