South Korea’s Hyundai Motor, the country’s largest automaker, has expressed its interest to construct an assembly facility in Mexico in the near future, with the latter now Latin America’s biggest vehicle-producing market.
Mexico has attracted numerous automotive investments, both from automakers and their suppliers, thanks to a unique set of factors: a low labor market, a strategic geographic position and the numerous free-trading agreements with regions all over the world. “Hyundai wants to turn Mexico into a very important base for its global production,” commented Pedro Albarran, managing director of the automaker’s Mexican unit. “I’m sure that over the years we’ll see production of Hyundai products in Mexico.” The fifth largest carmaker in the world, when considered with sister company Kia Motors, is in no hurry though – the executive believes the company will first wait to see deliveries rise above 50,000 units per year before building the factory. Seoul-based Hyundai sold last year in Mexico just 12,000 units, but the forecasts put it above the 50,000 units level by 2018.
Albarran also said a formal announcement about Hyundai joining the roster in having local assembly in Mexico is also possible before that date. That would fall in line with the recent roster of pledges. Affiliate Kia announced in 2014 it would build its own plant in Mexico after BMW previously made a similar move. Also, Daimler and Nissan said they would set up a joint production operation. Nissan, Honda and Mazda have already started local assembly of vehicles since November 2013. Recent reports are also seeing Toyota ending its self-imposed three year expansion freeze through a Mexican factory investment.