BMW could expand its production operations with a new plant in Russia, where the new cars market is finally recovering after a four-year decline. The Bavarian brand sees the country "over the long term as a growing market for the BMW Group," a spokesman for the company told Automotive News, and a local facility could be a clever investment.
Currently, Bayerische Motoren Werke is cooperating with Russian company Avtotor to assemble some of its sedans and SUVs from kits in a factory in the city of Kaliningrad. The Baltic Sea town is also a potential location for the new production plant of the German manufacturer.
In an emailed statement to the online publication, BMW said it had made progress "in elements of an agreement for future cooperation with our longstanding partner Avtotor," also explaining that Kalingrad is considered as a "feasible location" for a new factory. At the moment, it's not clear what models BMW plans to produce in Russia.
For the first nine months of the year, BMW sales in Russia grew by six percent, while industrywide deliveries are up by 11 percent. That's significantly higher than earlier predictions of only four percent growth for 2017 compared to 2016.
Earlier this year, BMW's arch rival Mercedes-Benz began construction of a production plant near Moscow, representing the first investment from a major foreign automaker in the country since Western sanctions from more than three years ago. The factory is planned to be operational in 2019 and to produce the E-Class sedan, followed by the GLE, GLC, and GLS crossovers.
The German premium brand is investing about $279 million in the plant, as it wants "to build cars where customers are." More than 1,000 people will be employed at the new facility in the city of Esipovo, 37 miles (60 kilometers) from Moscow.
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