With a great business climate thanks to numerous commercial agreements and with low labor costs, stomach Mexico has been the place to go for automakers aiming to establish new plants in the North American region.
According to sources that are directly implicated, South Korea’s Kia will follow suit on European and Asian manufacturers that have regional facilities in Mexico. The people, who declined to be identified ahead of the public reveal of the investment, said that Mexico’s president Enrique Pena Nieto should officially reveal the project later today. They also didn’t have specific information – such as the models that would come out of the production lines. They did reveal the investment would surpass the latest one – a 1 billion euros ($1.3 billion) factory project jointly developed by Daimler and Nissan.
“Having a Korean company enter Mexico will mean that practically all global automakers will be represented in the country,” said Armando Soto, president of Kaso y Asociados, a Mexico City-based auto industry consultant. “It will also trigger large investments from Korean auto-parts companies.”
The report is backed by Mexico’s Economy Ministry, which revealed in a statement yesterday that president Pena Nieto would be making an automotive related investment announcement today. The new factory should be built in the Nuevo Leon state, in Pesqueria, near Monterrey, added one of the sources.