Trade war won’t affect BMW plant

BMW AG, among the worst-hit carmakers from the U.S. trade war with China, said the tensions will play a secondary role in decisions on where it’s making cars.

The current spat, set to cost some $340 million this year from higher tariffs, is probably temporary, BMW’s Chief Financial Officer Nicolas Peter said in a panel discussion in Paris. The company follows demand expectations in choosing where to locate production, he said.

“I am optimistic and I think eventually men and women in charge will realize” the trade restrictions “aren’t the best for citizens,” Peter said at the event, which was focused on FrancoGerman relations. “It is not like: ‘We invest here because of tariff issues.’ It is mostly about whether the market is growing.”

The world’s second-biggest luxury carmaker ships popular sport utility vehicles to China from its plant in the U.S., which has attracted a punitive 40 percent tariff since July. BMW is nearing a decision in the next few weeks on producing another model in China, Peter said.

Peter reiterated a plan to invest $600 million at Spartanburg, S.C., the company’s largest factory, to boost output to as many as 450,000 cars annually. The company started making the X3 SUV in China this year, in addition the several other models like the 1-, 3- and 5-Series sedans. He declined to say which model BMW is set to start making locally.