Due to tremendous competition from European and Asian manufacturers, major U.S. firms have been forced to find ways of reducing costs. Some have announced the increase of production lines in Mexico.
Ford Motor
Ford Motor Co. announced an expansion of their Hermosillo, Sonora plant. In October 2003, a new project to expand this plant was confirmed, with added investment of US$1.8 billion. This project includes the establishment, in the region, of a group of Ford associates, suppliers of resins, packaging materials, electronic parts and mechanical products, among others.
General Motors
With an initial investment of US$650 million, General Motors Mexico will establish an assembly plant in San Luis Potosi with a capacity to produce 30 vehicles per hour. Nemak, a subsidiary of Grupo Alfa, reported that General Motors granted them a contract for the production of a new V block. The new project consists of a total volume of 450 thousand blocks for GM vehicles to be sold worldwide. Manufacturera de Cigueñales de Mexico inaugurated the expansion of its plant located in Ramos Arizpe, increasing production capacity to 1.5 million crankshafts per year. GM has re-designed their Chevy production lines in their Ramos Arizpe plant.
Nissan
Nissan invested US$1.3 billion to take its installed production capacity from 234 thousand to 350 thousand units per year by 2008. Jatco, a Japanese company and Nissan subsidiary, will invest US$300 million in Mexico to expand its production capacity and increase from 300 thousand to 800 thousand transmissions per year. Nissan also announced expansion of their central Mexico (Aguascalientes) and Cuernavaca plants.
Toyota
Toyota announced an expansion of their Baja California plant. Toyota Motor Manufacturing de Baja California announced an increase in its capacity to produce Tacoma pick-ups by 20 thousand units, to reach an annual production of 50 thousand vehicles and 200 thousand pick-up bodies. Toyota is analyzing the possibility of establishing another assembly plant in North America, possibly in Mexico, to meet the growing demands for Toyota cars in this region. Metalsa, a subsidiary of Proeza Group, will open a chassis manufacturing plant in Saltillo in June 2007, with a capacity to produce 50 thousand units per year for the Toyota trucks. Toyota also recently announced that they seek to source the majority of their parts and components from Mexico or south of Mexico for their new truck assembly mega project in San Antonio, Texas, to take advantage of lower production costs in these countries.
Additional Brand Activity
Volkswagen recently announced that they are looking to expand their Puebla plant or open a new plant in the Monterrey-Saltillo area. Daimler Chrysler is increasing their light truck plant production capacity in Saltillo. Assembly plants are also being opened for Seat, Renault, Peugeot, and Honda in several states of Mexico. And with a US$2.5 million investment, Spain’s passenger bus OEM Rizar expanded its manufacturing plant Queretaro. Navistar International’s Mexican plant located in Escobedo, Nuevo Leon, will manufacture the “Traveler” bus, designed for short distance passenger transportation. The bus and truck OEM Diesel Nacional and American Coach started assembly operations for the domestic and export markets and expansions for Mexico’s auto industry supply chain.
