Auto Industry In Mexico
I found this in the internet today.
Mexico becoming a major force in world’s automotive industry
By Tim Johnson
AGUASCALIENTES, Mexico -- It might be a stretch to describe Aguascalientes in north-central Mexico as the new Detroit. But it wouldn’t be a huge stretch.
Mexico’s automotive sector is at full throttle, and Aguascalientes is one of several cities primed by foreign car manufacturers to rev its engines. Once a sleepy railway crossroads, Aguascalientes now has two massive auto plants and a third on the way. This is making it what one national newspaper called a “mini-Detroit.”
“We’re going to produce 1.1 million vehicles just in Aguascalientes by 2020,” said Rodolfo Esau Garza de Vega, head of economic development in the state.
Nearly every major global automaker now either builds in Mexico or plans to erect an assembly plant in the country. Billions in investment have arrived.
Mexico has leapfrogged other auto producing nations. In 2009, Mexico was the world’s 10thlargest auto producer. But it’s soared past Spain and France, and earlier this year it surged by Brazil to become the world’s No. 7 automaker and the fourth largest exporter. Experts say Mexico is one of the most dynamic hubs of the global auto industry.
Gone are the days when Mexico produced only compact sedans and pickup trucks. Later this decade, new plants will be producing premium vehicles, BMWs and Mercedes, Infinitis and Audis. Many Nissan vehicles that roll out of the existing plants in Aguascalientes are bound not for domestic showrooms or to auto dealers in the United States but for Brazil, Colombia, the United Arab Emirates and dozens of other markets.
The huge growth comes not just because of Mexico’s good highways and railways, its healthy steel industry and its cheap wages. It’s also because of plentiful engineers and the skill of global automakers at keeping quality high, wherever their cars are built.
“The quality and cost of Mexican (automotive) products have no equal in Latin America,” said Luis Lozano Soto, automotive team leader at the Mexico City offices of PricewaterhouseCoopers, a global consulting firm.
There’s another key factor. President Enrique Pena Nieto, in announcing in August that the South Korean automaker Kia would build a $1 billion plant outside Monterrey, noted that Mexico has free-trade agreements with 45 nations. The United States, in contrast, has free-trade accords in force with only 20 countries. Brazil has only eight free-trade agreements.
“We have a unique geographical location with privileged access not only to North and Latin America markets but also those of Europe and Asia,” Pena Nieto said.
About 66 percent of Mexico’s auto exports currently go to the U.S. market, 8 percent to Canada, 11-12 percent to Latin America, 8.3 percent to Europe and the remainder to Asia and the Middle East, Lozano said.
The history of Nissan, the Japanese automaker, in Mexico reflects the growth of the auto industry as a whole.
More than half a century ago, Nissan chose Mexico as the site for its first assembly plant outside Asia. Now it dominates the Mexican market, with a 26 percent share. Five of the top 10 best-selling vehicles are Nissan models.
Nissan built its first plant in Cuernavaca, near Mexico City. It built a second plant in Aguascalientes three decades ago. Then in November, it inaugurated a second Aguascalientes plant, which it had built in a record 19 months. Now, its two Aguascalientes plants produce a car every 38 seconds during working hours.
Nissan exports cars it produces in Mexico to 50 countries, said spokesman Herman Morfin Ortiz.
At the new plant, a stamping facility that molds rolled steel into fenders and chassis parts clangs and hisses. But overall, the rest of the factory has little of the racket of older auto assembly plants. Each chassis moves along the assembly line on a silent robotic vehicle that follows a magnetic strip. It’s a major advance from the noisier overhead rails that pull a vehicle at the other Aguascalientes plant.
All workers wear gloves.
“The idea is that no worker touches the vehicle directly until the new owner takes possession,” said Irvin Herrera, who led visitors through the plant.
Next to the Nissan plant is the Douki Seisan industrial park, home to three component manufacturers. Shuttle vehicles deliver components, like new seats or engine hoses, to the Nissan plant, often more than once an hour.
The direct investment of automakers in cities like Aguascalientes has been huge. But Mexico also benefits from an incoming tide of auto parts manufacturers.
Nissan has about 300 suppliers today, 39 of them Mexican-owned companies, said spokesman Morfin.
“In 2013, we had procurement of about $4.4 billion. By 2016, we plan to triple that to almost $13 billion,” Morfin said.
As auto plants spring up across Mexico in cities like Celaya, San Luis Potosi, Monterrey, Salamanca and Saltillo, factories making electronics, tires and other automotive components are popping up, lining highways in central Mexico.
“It’s just a brutal knock-on effect. If you pass by Queretaro, it’s one factory after another. And it’s all auto parts,” said PricewaterhouseCoopers’ Lozano, who noted that some 550,000 people now work in some aspect of the nation’s auto industry.
About a third of all Japanese investment in Mexico now concentrates in the state of Aguascalientes, whose capital city of the same name has a population of about 1 million people. Garza de Vega, the state’s head of economic development, said 70 Japanese companies have set up in the state, some in logistics, services and spare parts for machinery.
A few billboards for real estate developments carry Japanese lettering. City officials estimate a Japanese population of about 1,100 people, enough families to fill the Japanese School of Aguascalientes, which goes through ninth grade. As Japanese kids sat on the floor eating their box lunches with chopsticks, a school employee, Jaime Gomez, said nearly everyone feels prosperity from the boom.
“There’s no unemployment in Aguascalientes. If you look for work, you will find it,” Gomez said. Engineering departments at local universities “are saturated” with local students hoping to get some of the higher paying jobs at the auto plants.
Mexico’s automotive industry is spread out, and analysts say that is a good thing. Ford has plants in Chihuahua and Sonora in the north as well as Morelos state near the capital. Puebla, near Mexico City, is hub of Germany’s Volkswagen. Honda produces vehicles in Guanajuato state and near Guadalajara, both in central Mexico. Toyota builds Tacoma pickups in Tijuana at the border. General Motors makes pickups and the Cadillac Escalade in Silao in Guanajuato state as well as sedans in Coahuila state abutting Texas.
“Car plants have definitely brought some of these cities onto the map. If you look at Hermosillo and the role of the Ford plant, or the Nissan plant in Aguascalientes, it’s made a big difference in those cities,” said Guido Vildozo, who oversees Latin America for HIS Automotive, a consultancy.
When Kia announced its new plant, which will begin making up to 300,000 cars a year in 2016, it chose a suburb of Monterrey, the northeastern industrial hub. In July, BMW said it would build a $1 billion plant in San Luis Potosi to produce up to 150,000 units a year of an unspecified luxury model, starting in 2019.
“The more the plants are spread out, the better off you are,” said Vildozo, adding that transportation systems don’t get overtaxed in any one area and employment benefits are shared among regions.
Overall production is soaring. Mexico built 2.93 million vehicles last year, the vast majority for export, and it is expected to speed past 4 million vehicles by 2017. As production soars and plants hire new workers, different Mexican states pull out the stops to draw automakers to their areas, trying to induce them to invest.
“They offer land and reduction off taxes,” said Lozano of PricewaterhouseCoopers. “If you have land already, they’ll do infrastructure, highways, provide water, build a railway.”
States cater in other ways to the German and Asian automakers coming in the current wave of investment.
Garza de Vega, Aguascalientes’ economic development director, said he got his job partly because he lived in Japan for 11 years, where he attended high school, later returning for an investment job.
“I speak fluent Japanese,” Garza de Vega said. “This has helped them (Japanese executives) feel confident that we can support them even in their own language.”
navegator
Mexico becoming a major force in world’s automotive industry
By Tim Johnson
AGUASCALIENTES, Mexico -- It might be a stretch to describe Aguascalientes in north-central Mexico as the new Detroit. But it wouldn’t be a huge stretch.
Mexico’s automotive sector is at full throttle, and Aguascalientes is one of several cities primed by foreign car manufacturers to rev its engines. Once a sleepy railway crossroads, Aguascalientes now has two massive auto plants and a third on the way. This is making it what one national newspaper called a “mini-Detroit.”
“We’re going to produce 1.1 million vehicles just in Aguascalientes by 2020,” said Rodolfo Esau Garza de Vega, head of economic development in the state.
Nearly every major global automaker now either builds in Mexico or plans to erect an assembly plant in the country. Billions in investment have arrived.
Mexico has leapfrogged other auto producing nations. In 2009, Mexico was the world’s 10thlargest auto producer. But it’s soared past Spain and France, and earlier this year it surged by Brazil to become the world’s No. 7 automaker and the fourth largest exporter. Experts say Mexico is one of the most dynamic hubs of the global auto industry.
Gone are the days when Mexico produced only compact sedans and pickup trucks. Later this decade, new plants will be producing premium vehicles, BMWs and Mercedes, Infinitis and Audis. Many Nissan vehicles that roll out of the existing plants in Aguascalientes are bound not for domestic showrooms or to auto dealers in the United States but for Brazil, Colombia, the United Arab Emirates and dozens of other markets.
The huge growth comes not just because of Mexico’s good highways and railways, its healthy steel industry and its cheap wages. It’s also because of plentiful engineers and the skill of global automakers at keeping quality high, wherever their cars are built.
“The quality and cost of Mexican (automotive) products have no equal in Latin America,” said Luis Lozano Soto, automotive team leader at the Mexico City offices of PricewaterhouseCoopers, a global consulting firm.
There’s another key factor. President Enrique Pena Nieto, in announcing in August that the South Korean automaker Kia would build a $1 billion plant outside Monterrey, noted that Mexico has free-trade agreements with 45 nations. The United States, in contrast, has free-trade accords in force with only 20 countries. Brazil has only eight free-trade agreements.
“We have a unique geographical location with privileged access not only to North and Latin America markets but also those of Europe and Asia,” Pena Nieto said.
About 66 percent of Mexico’s auto exports currently go to the U.S. market, 8 percent to Canada, 11-12 percent to Latin America, 8.3 percent to Europe and the remainder to Asia and the Middle East, Lozano said.
The history of Nissan, the Japanese automaker, in Mexico reflects the growth of the auto industry as a whole.
More than half a century ago, Nissan chose Mexico as the site for its first assembly plant outside Asia. Now it dominates the Mexican market, with a 26 percent share. Five of the top 10 best-selling vehicles are Nissan models.
Nissan built its first plant in Cuernavaca, near Mexico City. It built a second plant in Aguascalientes three decades ago. Then in November, it inaugurated a second Aguascalientes plant, which it had built in a record 19 months. Now, its two Aguascalientes plants produce a car every 38 seconds during working hours.
Nissan exports cars it produces in Mexico to 50 countries, said spokesman Herman Morfin Ortiz.
At the new plant, a stamping facility that molds rolled steel into fenders and chassis parts clangs and hisses. But overall, the rest of the factory has little of the racket of older auto assembly plants. Each chassis moves along the assembly line on a silent robotic vehicle that follows a magnetic strip. It’s a major advance from the noisier overhead rails that pull a vehicle at the other Aguascalientes plant.
All workers wear gloves.
“The idea is that no worker touches the vehicle directly until the new owner takes possession,” said Irvin Herrera, who led visitors through the plant.
Next to the Nissan plant is the Douki Seisan industrial park, home to three component manufacturers. Shuttle vehicles deliver components, like new seats or engine hoses, to the Nissan plant, often more than once an hour.
The direct investment of automakers in cities like Aguascalientes has been huge. But Mexico also benefits from an incoming tide of auto parts manufacturers.
Nissan has about 300 suppliers today, 39 of them Mexican-owned companies, said spokesman Morfin.
“In 2013, we had procurement of about $4.4 billion. By 2016, we plan to triple that to almost $13 billion,” Morfin said.
As auto plants spring up across Mexico in cities like Celaya, San Luis Potosi, Monterrey, Salamanca and Saltillo, factories making electronics, tires and other automotive components are popping up, lining highways in central Mexico.
“It’s just a brutal knock-on effect. If you pass by Queretaro, it’s one factory after another. And it’s all auto parts,” said PricewaterhouseCoopers’ Lozano, who noted that some 550,000 people now work in some aspect of the nation’s auto industry.
About a third of all Japanese investment in Mexico now concentrates in the state of Aguascalientes, whose capital city of the same name has a population of about 1 million people. Garza de Vega, the state’s head of economic development, said 70 Japanese companies have set up in the state, some in logistics, services and spare parts for machinery.
A few billboards for real estate developments carry Japanese lettering. City officials estimate a Japanese population of about 1,100 people, enough families to fill the Japanese School of Aguascalientes, which goes through ninth grade. As Japanese kids sat on the floor eating their box lunches with chopsticks, a school employee, Jaime Gomez, said nearly everyone feels prosperity from the boom.
“There’s no unemployment in Aguascalientes. If you look for work, you will find it,” Gomez said. Engineering departments at local universities “are saturated” with local students hoping to get some of the higher paying jobs at the auto plants.
Mexico’s automotive industry is spread out, and analysts say that is a good thing. Ford has plants in Chihuahua and Sonora in the north as well as Morelos state near the capital. Puebla, near Mexico City, is hub of Germany’s Volkswagen. Honda produces vehicles in Guanajuato state and near Guadalajara, both in central Mexico. Toyota builds Tacoma pickups in Tijuana at the border. General Motors makes pickups and the Cadillac Escalade in Silao in Guanajuato state as well as sedans in Coahuila state abutting Texas.
“Car plants have definitely brought some of these cities onto the map. If you look at Hermosillo and the role of the Ford plant, or the Nissan plant in Aguascalientes, it’s made a big difference in those cities,” said Guido Vildozo, who oversees Latin America for HIS Automotive, a consultancy.
When Kia announced its new plant, which will begin making up to 300,000 cars a year in 2016, it chose a suburb of Monterrey, the northeastern industrial hub. In July, BMW said it would build a $1 billion plant in San Luis Potosi to produce up to 150,000 units a year of an unspecified luxury model, starting in 2019.
“The more the plants are spread out, the better off you are,” said Vildozo, adding that transportation systems don’t get overtaxed in any one area and employment benefits are shared among regions.
Overall production is soaring. Mexico built 2.93 million vehicles last year, the vast majority for export, and it is expected to speed past 4 million vehicles by 2017. As production soars and plants hire new workers, different Mexican states pull out the stops to draw automakers to their areas, trying to induce them to invest.
“They offer land and reduction off taxes,” said Lozano of PricewaterhouseCoopers. “If you have land already, they’ll do infrastructure, highways, provide water, build a railway.”
States cater in other ways to the German and Asian automakers coming in the current wave of investment.
Garza de Vega, Aguascalientes’ economic development director, said he got his job partly because he lived in Japan for 11 years, where he attended high school, later returning for an investment job.
“I speak fluent Japanese,” Garza de Vega said. “This has helped them (Japanese executives) feel confident that we can support them even in their own language.”
navegator
