BMW Group’s long-term effort to strengthen its U.S. manufacturing footprint over the past three decades could help protect it from many geopolitical changes and tariffs, CEO Oliver Zipse said during the company’s third-quarter earnings call.
The automaker has 30 locations that include manufacturing sites and offices in 12 states, including the largest BMW Group plant in the world, which is located in Spartanburg, South Carolina. As a result, Zipse said, about 65 percent of the vehicles sold by BMW in the United States are produced at the Spartanburg plant.
“We have a strong footprint there, which protects us from anything that might happen on the geopolitical side,” Zipse said.
The CEO’s comments come as manufacturers in the US increasingly brace for further tariffs, should President-elect Donald Trump make good on his campaign promise. Honda Motor Co., for example, is evaluating whether production pivots could help mitigate tariffs.
But BMW’s CEO went a step further, saying the tariffs could potentially help the company gain market share.
“If you’re a local manufacturer with a local footprint, you’re obviously going to benefit in case there’s something that changes on the tariff side,” Zipse said.
Zipse highlighted the fact that its local production is high not only in the United States, but also in China, where the company produces 85% of its local sales.
“What you have there is a kind of natural protection,” he said.
Additionally, Zipse said the automaker’s commitment of 1.7 billion euros ($1.8 billion) to transition its massive Spartanburg manufacturing campus to build battery-electric vehicles will strengthen its position to increase US market share.
He said BMW’s annual U.S. sales through October are 7,000 units higher than a year ago, signaling growth potential as the company prepares to accelerate electric vehicle production. That still faced a hurdle in the third quarter, when the automaker’s U.S. EV sales fell 5.9% year over year. But year-to-date, U.S. EV sales increased 19.5% to 37,105 units, representing 15.8% of BMW’s total U.S. sales.
Zipse also highlighted the strong demand for SUVs in the United States, noting that it leaves the automaker in a strong position to increase sales. BMW’s X3, X5 and X7 SUVs and its X4 and X6 crossover sport utility vehicles are all manufactured in Spartanburg.
“We see a growing market for us,” he said. “It seems like we have the right product portfolio on both the combustion engine side and the electric side, so in the U.S. I think we have almost a perfect situation going forward.”
Edwin Lopez contributed to this story.