German Automakers Expanding Production Out of Europe

VolkswagenVolkswagenGermany, 1938 > present98 models
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, MercedesMercedes-BenzGermany, 1924 > present197 models
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and BMWBMWGermany, 1918 > present87 models
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are committing around $25 billion to expand out of Europe over the next four years to avoid currency fluctuations with the Euro. 

BMW will build the X4 at its factory in South Carolina and already builds the X3BMW X3 Gen.2Germany, 2010 > present26 versions
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, X5BMW X5 Gen.2Germany, 2007 > present32 versions
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and X6BMW X6Germany, 2007 > 201324 versions
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there. It is also spending €500 million to upgrade facilities in China and announced building a factory in Brazil last year. 

Mercedes is investing $70 million in its Alabama factory that will add 500 jobs and add three models to its lineup. At least one of those three will be a new SUV. It is also expanding production in China. 

"We're expanding our production capacity in China and the U.S. and we're considering other countries for vehicle assembly, such as Russia or Brazil," said Joachim Schmidt, head of sales at Mercedes.

AudiAudiGermany, 1909 > present83 models
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has confirmed that is it building a $1.3 billion factory in Mexico to take advantage of the North American and growing South American markets. 

Volkswagen has been adding production facilities all over the world from Mexico to China, and now produces 77% of its product outside of Europe, the most of any global automaker. 

"Our approach is a global approach. If you've got a spread of geographic presence, a spread of brand segments across the marketplace, then you can manage these fluctuations more easily," said Jonathan Browning, head of VW in the United States.

Producing cars abroad means that the automakers will be less exposed to currency fluctuations worldwide. It also reduces shipping costs and tariffs on cars, which increases profit margins.

Source: Automotive News Europe