The weak US economy and the low dollar value means that the automotive industry is looking to source more parts and engineering services from the country.

 

BMW's new purchasing chief, Herbert Diess, told Automobilwoche that the new X3 to be built in North America will be more competitive than the first model because local content will be more than 60%.

 

The X3 is currently built under contract by Magna_Steyr in Austria but the next generation model will be built in BMW's own South Carolina plant from 2010 at the latest.

 

By then BMW will also have a new engine plant outside the euro zone, production chief Frank-Peter Arndt told the newspaper. He said the plant would be built either in the USA or Asia.

 

BorgWarner president Bernd Matthes told Automobilwoche that the US currently has a 30% cost advantage over Europe. He said that Detroit is a particularly attractive location because of the availability of well-trained engineers.

 

Meanwhile jobs in Germany are under threat as manufacturing is transferred to lower cost countries. Automotive industry analyst, Ferdinand Dudenhöffer, estimates that between 15,000 and 20,000 jobs will be lost in the German automotive industry by 2013.

 

He said that most new investment in vehicle manufacturing is going to Russia and the US. At the moment demand in those countries is being met by exports from western Europe, but the weak dollar and the introduction of import tariffs in Russia means that this situation cannot continue.

 

"The weak dollar is accelerating capacity build-up in the USA," said Dudenhöffer in his report published in a German newspaper. At the moment German manufacturers sell 903,000 cars in the US but produce just 670,000 units there. By 2013 net exports will fall from 233,000 vehicles to just 100,000, forecast Dudenhöffer.

From: just-auto.com editorial team