France and The Netherlands: Pouring Money into New Manufacturing Facilities – Mexico’s Auto Industry Continues to Expand

08.24.16

Luring automakers from across the globe with free trade agreements, close proximity to the US and, likely the most important element to companies watching profit margins, lower manufacturing and labor costs, Mexico has become the world’s seventh largest auto producer.

The response to the significant climb in Mexico’s auto production has been nearly every major player in auto manufacturing opening plants throughout the country. Toyota and Ford both opening new plants just last year, General Motors, Daimler AG- the maker of Mercedes-Benz, BMW, Kia Motors and Nissan, among others, have all placed at least one major manufacturing to the south of the world’s second largest auto maker, the United States.

The support needed for such production is, of course, companies that produce everything from tires to aluminum to partner with all the automakers landing in Mexico. Michelin, the French tire maker, is scheduled to build a $510 million plant in central Mexico, creating over 1,000 jobs. Early projections suggest the plant will produce around 5 million tires a year and quite possibly be expanded to double production by around 2020.  A construction start date is expected as early as the end of this month.

Michelin is no stranger to operating in Mexico; the company has their North American headquarters and another manufacturing plant, employing more than 630 people, located in the central state of Queretaro. Last year Michelin’s rival, Goodyear Tire & Rubber Co also laid out plans to build a $550 million plant in the central state of San Luis Potosi.

On the aluminum side of auto production, Constellium is putting some skin into Mexico’s expanding auto industry.   The company is a global leader over a century old and develops aluminum products for a wide array of markets, including the automotive industry. With a $10 million USD investment in a 5,000 square meter facility, Constellium is jumping on board in a big way.

The plant, to be located in San Luis Potosí, initially plans to employ approximately 100 people, and will produce lightweight, high-strength aluminum automotive structural components. There is already speculation of the plant being expanded to 13,000 sq meters in the future to adapt to customers’ supply needs.

Eric Krepps, Constellium’s general manager of Automotive Structures for North America, said, “By bringing our manufacturing processes to Mexico to be near our customers’ assembly plants, we have a new opportunity to support automakers in their mission to make vehicles lighter, thereby improving fuel economy and lowering emissions.”

Krepps added, “I would like to thank the Governor of the State of San Luis Potosí, Juan Manuel Carreras López, as well as the government of San Luis Potosí, for the warm welcome they have extended to us. We look forward to becoming part of your community.”

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