Build where you sell or where it’s cheapest?

For many years one of the automotive industry’s maxims was 'build where you sell', with ostensibly global models made in different locations around the world, modified for their immediate market. This practice was widely followed, with the Toyota Corolla at one point made on every inhabited continental landmass across the globe. However there were always some cases where volumes did not justify multiple production locations, especially in the premium segment.

That began to change when the German premium brands opened factories in North America for global supply of SUVs, eg the original Mercedes M-Class (now GLE) and BMW’s X5, with Chinese production also being established for the X5. In parallel, Western, Japanese and Korean brands accelerated their investment in Chinese production capacity, initially to supply the growing Chinese market.