Chrysler Group LLC is planning to invest nearly $1.25 billion in two Mexican facilities to produce the auto maker’s Ram ProMaster cargo vans and Tigershark engines, products that will be sold within that nation and abroad.
Roughly $1.1 billion of the investment will be for construction of a new plant to produce the Ram ProMaster, while an additional $164 million is set to be used to fund a new production line to assemble engines at an existing factory in Saltillo, Mexico. Saltillo is relatively close to Monterrey, one of Mexico’s largest cities.
Mexico’s manufacturing industry has a competitive edge due to its proximity to the U.S., relatively low wages, and low energy costs, as well as a number of free-trade agreements that make the country an attractive place to make goods destined for many markets. The biggest worry, however, is fears over security.
On Thursday, Chrysler said its investments would create 1,570 jobs. The Ram ProMaster assembled in Mexico will be sold in that nation, as well as the U.S. and Canada.
Chrysler, which recently filed plans for an initial public offering, has gotten a lift in the U.S. as low interest rates and slow-but-steady job growth embolden consumers to trade in worn-out cars and trucks. The auto maker has reported two consecutive full-year profits, earnings that have bolstered majority owner Fiat SpA, which has been stung by Europe’s economic woes.
