BMW reportedly increased production of the X3 SAV at both Plant Spartanburg in South Carolina and its Chinese production facilities ahead of tariff increases which took effect on Friday, May 10. According to Reuters, BMW board chairman Harald Krueger told analysts during the company’s first-quarter earnings call on Tuesday, May 7, that production of the X3 had been expanded for the U.S. market.
Ramping up X3 production in both China and the U.S. may sound counter intuitive on the surface, but the move is decisively aimed at decreasing exposure to tariffs and other protectionist trade policies that might be enacted between the world’s lone super power and China, an epicenter of global manufacturing, as the two nations attempt to even out decades of trade imbalance and wealth transfer.
It doesn’t take an expert to know that the X3 has been BMW’s most popular model for several months running, and for much of the elapsed lifespan of the third-generation platform collectively, which has been in production since 2017. Multiple facilities around the world are currently manufacturing the X3, including sites in Europe, in addition to those in the U.S. and China. Spartanburg also has the advantage of producing the ever-important X5, which is proving very popular in its fourth-generation, and the all-new X7, which seems to be filling pent up demand in its first few months on sale.
In addition to explaining the production schedule increase for the X3, Harald Krueger also went on to say that, because of BMW’s global manufacturing presence, “We are less sensitive compared to other companies if trade conflicts appear.”
Nonetheless, the global trade situation remains delicate, with protectionist policy coming at potentially steep costs that ultimately take the form of lost local manufacturing jobs, along with monthly, quarterly, and yearly sales that could also suffer as a result. When considering the incredible economic multiplier effect that accompanies manufacturing facilities like BMW Plant Spartanburg, the stakes grow even perilous.—Alex Tock
[Photos courtesy BMW AG.]