Suppliers cache inventory for next supply chain storm.

Although the auto industry held its breath last spring as car sales bottomed out, Colliers International's Dillon Swayngim says demand for nearby industrial speculative and warehousing space has been on the upswing in the Upstate.

And the pause in production at BMW Manufacturing and other plants only intensified the need for parts from nearby suppliers, the broker said.

Despite a 17% year-over-year drop in sales from the company, business isn't slow on the BMW factory floor. In fact, since the German automaker operates on a built-to-order schedule, production has been racing to keep up with backlogged demand, he said.

BMW of North America sold 98,750 vehicles during the fourth quarter of 2020, a 2% drop from the year before, according to a company news release. As the manufacturer broadens its market for online custom and retail orders, its sales team expects to increase sales of electric vehicles by 50%.

"Everyone is somewhat in that predicament," Swayngim said. "And what I think the bigger issue was during COVID was the supply chain routes and the disruption to those supply chain routes."

The German automaker brought in a flock of tightly linked suppliers to meet the demands of its just-in-time parts requirement. Now the company and its suppliers have taken on a "just in case" mentality, one factor that has sparked a 5% to 8% increase in warehousing absorption within the Greenville-Spartanburg market.

"Warehousing and 'safety stock' another buzzword there is increasing," he said. "So you're seeing that certainly not just in automotive but in manufacturing across the world."

One example of a supplier making room for greater inventory reserves is MingHua USA, an auto part-manufacturing subsidiary of Chinese Jiangnan Mold Plastic Technology Corp.

The Spartanburg tier-one supplier to BMW recently announced its lease of roughly 132,000 square feet of speculative warehouse space at Woods Chapel Crossing in Duncan, according to Swayngim's estimates. MingHua products will occupy part of the total 243,280-square-foot, cross-docked logistics facility upon completion, according to a news release.

Swayngim added that the space will also be used for light assembly.

"Despite the challenges levied by the pandemic, the automotive industry is holding steady and flourishing in the Southeast region," Thomas Koehler, president of MingHua USA, said in a news release. "As production regains momentum, the increased stream of manufacturing has required MingHua...