The trade war between China and the United States is well underway, and one of the consequences of that dispute is that the Middle Kingdom has raised tariffs on vehicles built in the US. In the midst of the fallout, BMW is moving some production of the Chinese-market X5 to Thailand, according to a report by Reuters.
Like almost all of BMW’s SUVs, the X5 is currently built at its North American plant in Spartanburg, South Carolina, meaning that it would be hit by the new 40% tariff on imported vehicles from the United States. The company started building the previous-generation X5 in Rayong, southeast of Bangkok, in 2016, and the plant is now capable of making a “significant portion” of vehicles destined for the Chinese market.
This was revealed during a conference call with analysts to discuss BMW’s results for the second quarter of the year, in which CEO Harald Krueger said, “This is one action to counteract [the tariffs].” The company is said to be producing between 10,000 and 20,000 X5s in Thailand as part of the measure.
It’s a indication of just how important a market China is for BMW, and to that end the company has also ramped up investment in the country. It has agreed with Chinese carmaker Brilliance to expand their joint venture, which will build the all-electric iX3 for export markets from 2022. It has also signed an agreement with Great Wall Motor to produce electric-powered MINI models in China.
GALLERY: G05 BMW X5
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Thailand’s happiness, Malaysia’s envy.
Not sure i envy Thais. Our X5 still cheaper. A check on BMW Thai website list the x540eMSport as Baht4,739m (or RM590k) whereas we get ours at RM360k (40e MSport). With that px diff i guess the Malaysia plant already full capacity to service local market..LOL
It is a matter of time before BMW close their Malaysia CKD plant and move all operations to Thailand.
Infact, there will come a time where all car manufacturers like Toyota, Mercedes and Honda will close all their CKD in Malaysia and open in Thailand.
This is because doing business is far cheaper and ZERO red tape in Thailand.
We must thank the previous corrupted regime for making so much red tape in Malaysia that Thailand became the Detroit of Asia due to ease of doing business there
Cukurlah MY still have cheapest tariff. MY pipu can buy affordable BMW of Asia.
Volvo shud consider moving production of XC90, XC60 & XC40 to Tanjung Malim to avoid Chinese tariffs…
VolvoCar alredi assembles XC90 here. XC60 & 40 soon.
BMW? Made in US for China? What happen to Germany?
Itu semua President Trump punya fault !!
BMW has been making almost all of their SUVs in the US since the first X5.
So sad. Why not in Malaysia?
Our NAP should change to focus on attracting more foreign strategic partner to expand their production capacity, localise spare parts, supply chain and become a regional export hub instead of keep dreaming of setting up new National car.
Our national cars fully rely on local market, failure is the destiny.
Does that mean XC5s made in US r used for EU as well? So will they tariff it like US cars too?
Typo: X5s.
How about our Kulim plant?
Prepare for proton 3.0
President Trump the TRAMP think that increasing tariff on China goods will not affect the Americans.
Little did he know that it will affect the Americans who is producing BMW for export to China.
With the tariff hike, those American workers in BMW factory may have to cut jobs bcoz Thailand will benefits from the war.
Siapa untung? Thailand lagi. Truly the Detroit of ASEAN.
If only we have not the protectionism NAP, M’sia could have been the Detroit of ASEAN. Alas, we were too engrossed in protek, protek, protek mindset that hindered progress.
Need to protek P1 2.0. New proteksion coming soon.
Meanwhile, in Malaysia, we’re going to build new brand