Increasing tariffs could see German marque shift production from Spartanburg, its largest facility.
- shares

BMW could be forced to shift some of its production volume from the US to China, as the trade war between the two nations escalates.

Speaking with industry journal, Automotive News, BMW's North American boss, Bernhard Kuhnt, said the increasing import tariffs have "put some pressure" on the brand, leading it to re-evaluate the production schedule of its facility in Spartanburg, California.

The higher tariffs lead to more expensive vehicles, which "will have an effect on the customer behaviour".

Currently, the Spartanburg plant produces the BMW X3, X4, X5 and X6, with 73 per cent of the site's 371,284-unit output exported in 2017. Of that 73 per cent, "nearly a third" went to China, according to the publication.

The United States imposes a 2.5 per cent import tariff on all overseas manufactured cars. However, for Chinese-manufactured vehicles this figure rises to 27.5 per cent. China, on the other hand imposes a 40 per cent tariff on all US-sourced cars.

Last week, the Trump administration said it was considering another increase on the Chinese import tariff to 40 per cent.

The tariff war is projected to hit BMW's 2018 earnings by €300 million ($461.4m), Nicolas Peter, CFO for BMW, told Reuters.

"We will take a final decision in the coming weeks about which model to localise next in China," Peter added.

BMW's situation echoes that of Swedish marque, Volvo, which has also been forced to shuffle its American and Chinese production in response to the trade war.