Mexico is currently eleventh in the world in automotive production and by 2011 will rank fifth, competing with stronger economies such as India, United States, China and Slovakia. This competition must be sustained in the flexible and diversified growth of the U.S. companies in the sector and that they must use, with better efficacy and efficiency, the supplies, trade agreements, geography and customs benefits provided by Mexican government.
Auto Plant in Mexico
There is no doubt, Mexico is an attractive choice for automotive industry looking to reduce and improve processes, without forgetting quality and value added that the world market calls for.
Mexico has been expanding as of late. Recently, the American car manufacturer, DaimlerChrysler, opened a plant in Coahuila. DaimlerChrysler invested a reported 52 million dollars in the plant to open it, and the contract signed is worth up to 360 million dollars. This was just the latest of the plant openings in Mexico. Other major carmakers with large plants in Mexico are General Motors, Ford, Renault-Nissan and Volkswagen.
Large American car makers, such as GM and Ford, have struggled holding on to market share in the United States car market. This, however, has not had any affect on production in Mexico. In fact, production has picked up in Mexico as the problems have risen for the American car companies.
Assembly plants are now requiring that their suppliers be as close as possible to them in order to reduce inventory volumes and to facilitate just-in-time delivery during the assembly process. This shift in production areas has forced many U.S. first- and second-tier suppliers to move to these new areas so that they can produce at lower costs, reduce freight and handling expenses, and deliver parts and components very quickly in a JIT program.
