The Latin American country seems to have become the place to go for automakers aiming to expand their production capacities in the NAFTA region.
The last major carmaker that hasn’t yet built an assembly facility is the world’s largest automaker – Toyota – and according to Steve St. Angelo, head of Toyota’s Latin American unit, the decision is far from being approved.
“There is a team studying it, but I’ll be honest with you, it’s still far from being an approved project,” said the official to reporters during a Tokyo event. The assessment process is a lengthy one and top management clearance could take a while.
Mexico has been riding the wave of auto industry investments because of low labor costs and a recent string of favorable trade agreements with the US, South American countries and other parts of the world. Kia, BMW and Daimler together with Nissan each announced plans to construct $1 billion-plus plants in Mexico since June, adding to already existing facilities from rivals.
On the other hand, Toyota’s president, Akio Toyoda, weary of the financial effect of over-expansion, has ordered that any factory plans should be made only after existing facilities have exhausted all possible measures to increase current production capacity.