The BMW Group is planning to invest some THB1.1 billion (USD30.7 million) in Thailand to expand capacity at its local plants, reports local daily the Bangkok Post. Jurgen Maidl, the senior vice-president at the local unit, BMW Manufacturing (Thailand), said, "Under this new investment, the assembly capacity is expected to reach 20,000 units per annum [upa] for BMW and Mini [brands] and 10,000 motorcycles per year for BMW Motorrad from 2016."
Significance: According to IHS Automotive data, BMW has been present in Thailand for more than a decade and currently sells more than 15 nameplates in the country. Of these, about seven models are assembled locally with kits sourced from its plants in Germany, South Africa, Austria, and the United States, while the rest of the models are imported as completely built-up units from its plants across the world. BMW invested about EUR9 million (USD10.1 million) at its Thai unit to raise assembly capacity from 8,880 upa to as much as 10,000 upa starting this year. Jeffrey Gaudiano, the managing director of the local unit, further said that the proposed investment will be aimed at boosting its vehicle exports to other neighbouring markets in the Association of Southeast Asian Nations (ASEAN) region. The automaker began local assembly of the 3-Series GT and the X5 sport utility vehicle (SUV) towards the end of last year, according to IHS Automotive data. In lieu of the current sluggish domestic vehicle demand conditions, boosting exports appears to be a strategic step to maintain profitability. We expect total light-vehicle assembly at BMW's Rayong plant in Thailand to gain 19.8% year on year to 7,725 units in 2015. BMW was separately considering investing THB600 million to install a new engine line at its Thai plant, although the report remains unconfirmed at the time of writing.
