Investments in Mexico automotive industry
By Adina Moloman
Sources: Reuters, Audi Media Services, www.kpmg.com
In the last 20 years, the Mexico Maquiladora Industry has received high amounts of investment and in particular in its automotive sector. The Mexican automotive sector can be considered nowadays a consolidated sector with the presence of important transnational corporations also called OEM’s such as: Volkswagen, Ford Motor, Chrysler, General Motors Company, Nissan Motor, Honda, Toyota, etc.
The majority of transnational corporation are concentrated in the center and northern regions of the country.
Forecasts are showing that the Mexican automotive industries will continue to grow and expand in coming years. Why the options for investing in Mexico automotive industry remain interesting?
The reasons that many leading players in the global automotive market are decided to invest in manufacturing in Mexico and/or expand their current operations in Mexico are basically related to costs and resources associated with market entry. We can name a few: more than 40 years of experienced workforce base, the access to industry know-how, the presence of the majority of global OEM parts suppliers, free trade agreements with 44 countries, proximity to the U.S. automotive market which allows for lower transport costs and a reduced time to market, the current infrastructure, the potential for growth in the domestic market, as well into the Latin America market in general.
May 2013, a ceremony where Audi executives laid the foundation stone for its first assembly plant in the Americas. The exact location of the Audi plant is in San José Chiapa, Mexico, a total investment of 900 million euros for a body shop, an assembly line, and a press shop. By 2016, Mexico will manufacture the Audi Q5 model.
Honda Motor Co announced in May 2013, that it would build a $470 million transmission plant in Guanajuato, near an $800 million assembly plant that is expected to begin operations in February 2014. In the northern part of the country, Hyundai in Tijuana is about to complete the construction of its new diecasting plant, where it will produce 900,000 units of engine blocks, engine cylinder heads and transmission cases.
