Dec. 3 (Bloomberg) -- Bayerische Motoren Werke AG, the world’s largest maker of luxury cars, plans to almost triple purchases of auto parts in Mexico by 2011 to help limit production costs.

BMW expects to spend $2 billion, up from about $700 million now, on supplies such as seat coverings made in Mexico, Alfredo Monroy, a BMW global sourcing coordinator for Mexico and Latin America, said in an interview today. The components will be used in some models produced in Germany, he said.

“We’re seeking to increase the purchasing volume,” Monroy said during an auto conference in San Luis Potosi, Mexico. “Our overall strategy is to reach our target cost” for those cars.

The automaker created a worldwide purchasing unit last year that helps reduce expenses by getting more parts from emerging markets. BMW set up offices in eight countries, including China, Mexico, Hungary and Turkey, to find new suppliers, Monroy said.

Mexico is second only to China in terms of lowest-price auto components, Monroy said. Parts shipped to Germany from Mexico cost about 10 percent more than those from China, and about 8 percent less on components from Asia-Pacific countries including Malaysia, Thailand and Indonesia. BMW has 60 suppliers now in Mexico.

To contact the reporter on this story: Thomas Black in Monterrey, Mexico, at tblack@bloomberg.net and

Last Updated: December 3, 2008 15:32 EST