BMW Manufacturing releases statement on tariffs, remains committed to being 'corporate citizen' of the US

BMW logo (File/ FOX Carolina)

BMW released a statement Wednesday in response to trade conflict between the U.S. and China.

According to the Associated Press, analysts at Sanford C. Bernstein said that BMW, Mercedes-Benz and Tesla are the biggest potential losers from higher Chinese tariffs on U.S. auto imports.

The statement is attributed to Kenn Sparks, Head of U.S. Corporate Communications for BMW.BMW Group stands for free trade worldwide. Our company has a global production network, global sales, and global purchasing. Free trade has made the success story of BMW Group in the U.S. possible. In our opinion, a further escalation of the trade conflict between the U.S. and China would be harmful for all stakeholders.

BMW’s U.S. plant in Spartanburg, South Carolina exported more than 70 percent of its total production volume of 371,284 units last year to 123 countries. Approximately one-fourth of the BMW X models manufactured in the U.S. in 2017 were exported to China. China is the number one export destination for the X models produced by BMW here in the U.S. Germany is the second largest export destination from the U.S. According to the US Department of Commerce, the BMW U.S. plant is the highest value exporter of vehicles from the United States.

Given the global demand for BMW X models, the company had previously announced the new X3, which is now in production in the U.S., will also be produced in China and South Africa. For China, this will be the 6th BMW model to be manufactured in China. The BMW Group has a strong localization strategy in its main markets – the US, China and Europe.

The Chinese government has not announced a timeframe for implementation of the announced tariffs. BMW Group is monitoring the situation for any further developments.

The Associated Press shared the following information in a previous story on the tariff conflict and impact on auto manufacturers:

Bernstein said in a note Wednesday that BMW sends 89,000 vehicles annually from the U.S. to China while Daimler AG's Mercedes-Benz ships 65,000. Tesla sells about 14,000 but China accounts for around 15 percent of forecast Model S and X sales this year.

If enforced, the measures announced by Beijing earlier would increase tariffs on cars from the United States to 50 percent from the usual 25 percent.

BMW is headquartered in Munich, Germany but claims the title of biggest U.S. car exporter by shipping vehicles including its X5 SUV from its Spartanburg, South Carolina plant. Stuttgart-based Daimler builds Mercedes in Vance, Alabama.

The Bernstein team raised the question of whether the threat of a U.S-China trade war could "nudge the Germans toward localization" -- that is, moving production to China.

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