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European Automotive Manufacturers Look to Mexico

06 Mar 2012

Over the last year or more, the Mexican automotive sector has seen a major influx of investment related to the production of light vehicles. A good portion of the new capital being employed in automotive manufacturing in Mexico has come from the Far East. Over the past year, large projects have been announced by prominent Japanese automakers such as Nissan, Mazda and Honda.

Because of Mexico’s proximity to major North American and South American consumer markets, European automotive manufacturers are also viewing automotive manufacturing in Mexico as being central to their strategies for future corporate growth.

Mercedes Benz is looking to build a new plant in either the U.S. or Mexico in the near future. This move will be made to bolster the sales of its company’s vehicles in the near term, and is also part of the push to achieve Mercedes Benz’s goal of doubling its North American vehicle sales by 2020.

Dieter Zetsch, the CEO of Mercedes, parent company, Daimler, recently emphasized the company’s commitment to making the Mercedes brand the dominant one in the luxury car segment of the North American light vehicle market sales.

One of the options that Mercedes is reported to be considering in order to pursue its goal is the creation of an alliance, in the form of a joint-venture in Mexico, with Nissan to build the next generation A Class vehicle. The companies may also partner to build a small model Infiniti toward the end of the decade

Another European automotive manufacturer looking at Mexico as the potential site for a new North American facility is Audi. Although a new facility for the region has been given the green light by the company’s top executives, it is still speculation that the new automotive manufacturing facility will be located in Mexico. Mexico is, however, at the top of Audi’s list. A final decision as to where the new Audi plant will be sited should be made in the foreseeable future. Johan de Nysschen, recently explained that the timing of the automaker’s decision will coincide with the time at which there is a North American demand for at least 100,000 units of a vehicle in the Audi line.

In 2011, the Mexican automotive industry produced a record number of vehicles. The industry seems to be following the same trajectory in 2012.

It is anticipated that with the announcement and execution of large investments in Mexico by large OEM automotive assemblers, Mexico will continue to be a magnet for the second and third tier suppliers that sell them automotive parts.

The Offshore Group offers its La Angostura Industrial Park as an option for suppliers seeking to set up automotive manufacturing in Mexico operations in Saltillo, Coahuila.

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