Tire producers join car makers in Mexico image

French tire maker Michelin said it would build a plant in Mexico, a move that follows similar plans from rival companies.

Many global automakers have already announced plans of expanding their facilities and increasing the production pace or even building new plants in Mexico, as the country has been tempting the companies with its affordable work force and the proximity with the US’ huge market. The tire makers have shown their interest for Mexico as well and France’s Michelin recently said it would build a production facility in Leon, in the central state of Guanajuato, with the first tires set to come off the lines in the fourth quarter of 2018. The construction of the 142,000-square-meter plant, which represents an investment of 450 million euros (510 million dollars), is expected to begin in second-half of 2016.

The new facility will first make four to five million tires a year, for the rate to be gradually ramped up. “The location was chosen because it is just a three-hour drive from the production facilities of 18 large car manufacturers with operations in Mexico,” Michelin said in a statement. “Michelin is building this plant to respond both to sharp growth in Mexico’s automobile market… and to take advantage of growth opportunities in the dynamic North American market.”

The rival Milan-based Pirelli also revealed earlier this year its intention of investing further 200 million dollars in the extension of its site in Silao, a city in the west-central part of the same state of Guanajuato in Mexico, to boost the production capacity from 3.0 million tires in 2015 to 7.5 million by the end of 2018. Last year, Goodyear announced a new 550-million-dollar facility in the central state of San Luis Potosi.