Automotive logistics: new markets expand into Mexico
Despite eventual changes to the North American Free Trade Agreement (NAFTA) and possible fees to Mexican imports to the United States, automotive brands from around the world are expanding within Mexico for its competitive advantages.
Even though companies are putting forward or adjusting upcoming projects, other manufacturing plants have “reaffirmed their confidence to continue investing in Mexico”, according to T21.
There are still active signals in the market, as several brands frome Europe and Asia are investing in new assembly lines, manufacturing plants and logistics capacity.
Audi begins operations in Mexico
The German company will star developing the second generation of its Q5 model at a new manufacturing facility in San José Chiapa, Puebla, in a US$ 1,123 million investment.
Audi opened the plant in September 2016, and expects to produce 15,000 units a year to export around the world- except India and China- reported EFE news agency.
The company also set out an area for automotive logistics suppliers, located near its assembly line.
Toyota consolidates the largest cluster in Latin America
The Japanese giant is working at a manufacturing plant in Guanajuato. The US$ 1,000 million investment will produce the Corolla model, according to El Financiero.
With the arrival of this manufacturing plan, the state of Guanajuato would become “the largest automotive cluster in Latin America,” according to the newspaper. This international logistics and distribution hub would benefit over 100 companies, 50 of which are a new supplier base.
China continues its expansion
Legacy brands are also giving way to more investments from Asian companies.
Mexican manufacturer Giant Motors announced it would invest over US$ 210 million to expand its premises in Ciudad Sahagún, Hidalgo, to manufacture cars from JAC Motors for the local market, according to Economíahoy.mx.
Miguel León Garza, the dean of the Instituto Panamericano de Alta Dirección de Empresa (IPADE), explains at Excelsior that Mexico has a series of comparative and competitive advantages that has positioned the country as a “leader in manufacturing and exports in world automotive goods”.
He adds that Mexico provides a great location, trade deals with over 40 countries, the quality of its workforce and a low-cost supply chain, as opposed to the United States.