BMW did consider building a plant in Eastern Europe, but the presence of important suppliers on markets in the West outweighed the advantages of the cheaper labour in the East.
"Compared to Romania, Germany pays very high wages. Salaries in Romania are less than 20% of those for a similar position in Germany or any other Western European countries," Ernst Baumann, a BMW board member, told ZF.
Compared with the Western European car market, car sales have registered significant growth in Romania, particularly on the premium segment, which registered an increase of over 50%.
"Premium car sales advanced due to the country's economic growth. In Western Europe, BMW sales only registered declines in Germany, in line with the overall car market. Other markets posted increases of several percentage points, but when one takes into account the overall volume, the value is significant. Of course the situation is different in the West compared to Romania. Nevertheless, Europe continues to be BMW's largest market, accounting for over 60% of sales. (...) All forecasts point to a rising premium segment, and BMW believes it will outpace this growth," explained Baumann.
With a total of seven plants in Germany, BMW considered building a plant in Eastern Europe, but the presence of suppliers in Western Europe outweighed the advantages of lower wage costs. However, there are BMW suppliers with production facilities in Eastern Europe, while the auto parts industry is witnessing significant growth in Eastern Europe.
"(...) Over the next decade, BMW does not expect to build a production facility in Eastern Europe, but could do it in the next 20 years. At present, nobody knows exactly how the markets in Eastern Europe will evolve. Nobody was expecting such rapid growth in countries like Russia or Romania. Therefore, we won't say 'no' to building a plant in Easte
