San Luis Potosí, Mexico - BMW will expand production of its bestselling vehicle, the 3-Series sedan, to North America when it opens its newest plant one hour north of Mexico City in 2019.

The German automaker broke ground at its San Luis Potosí plant on Thursday and announced plans to invest $1 billion in the state-of-the-art facility. The 3-Series will continue to be built in Germany as the plant ramps up to an annual capacity of 150,000 units. BMW's South Africa plant, which also makes the 3-Series, will switch to the X3 crossover once the Mexico factory opens.

Mexico is quickly becoming North America's car capital, as global automakers have flooded to the region, attracted by liberal trade agreements, cheap labor rates and a well-educated workforce.

"Mexico is a growing market with promising dynamics," Oliver Zipse, BMW's head of production, said at a ceremony attended by local government officials including Dr. Juan Manuel Carreras López, Governor of the state of San Luis Potosí, and Jose Rogelio Garza Garza, Undersecretary of Industry and Commerce at the Mexican Ministry of Economics. "As a NAFTA country, it has direct access to a region with a considerable growth potential for premium mobility."

Building the 3-Series sedan, which sold 94,540 units last year, could be an auspicious starting point for the new plant. The automaker's largest plant, in Spartanburg, S.C., also cut its teeth on the sedan when it opened 22 years ago. Now it makes BMW's crossovers and SUVs – the X3, X4, X5, and X6 – and will build the X7 three-row SUV, which will reach showrooms in 2018.