BMW to invest $1 billion in Mexico car factory

Germany’s BMW says it will invest $1 billion to build a new luxury car factory in northern Mexico.

BMW board member Harald Kruger says the plant in the northern state of San Luis Potosi will have the capacity to make 150,000 cars per year.

Kruger made the announcement Thursday in Mexico City, accompanied by President Enrique Pena Nieto.

He says BMW has 28 factories in 13 countries.

The announcement comes a week after automakers Daimler and Renault-Nissan said they would invest $1.6 billion in a factory to make premium compact cars in Mexico.

Mexico has become a preferred spot for car makers because of low wages, its proximity to the United States and free trade agreements with 45 countries.