BMW could shift more SUV production to China due to tariffs

2019 BMW X5 — BMW has moved some production of its X5 SUV overseas, in an effort to combat tariffs imposed by the US-China trade battle.
Chris Paukert/Roadshow

BMW could move more of its crossover and SUV production to China, in an effort to hedge losses caused by the Trump administration's tariffs. According to BMW Chief Financial Officer Nicolas Peter, speaking to Automotive News on Wednesday, the company will make "a final decision in the coming weeks about which model to localize next in China."

The German automaker currently builds its X3, X4, X5 and X6 crossovers and SUVs at its facility in Spartanburg, South Carolina. But because of the trade battle between the US and China, BMW has had to move production of volume sellers like the X3 and X5 elsewhere. China currently imposes a 40 percent tariff on vehicles imported from the United States.

"If the tariffs undermine the competitiveness of BMW production and sales in the US, the result could be strongly reduced export volumes with negative effects on investments and jobs in the US," BMW spokesperson Kenn Sparks told Automotive News.

The Trump administration's tariffs are expected to reduce BMW's 2018 earnings by around $344 million, according to the report.

BMW's Spartanburg facility is the company's largest in the world, building more than 370,000 vehicles last year. Over two-thirds of that production was made up of vehicles exported to other global markets, including China.

BMW's new X7 will soon join the party in Spartanburg. The automaker's full-size SUV goes into production in December.

Should BMW decide to move more crossover and SUV production to China, it's unclear if this will negatively impact jobs or overall investment at the Spartanburg facility.