News, Insights and Best Practices for Manufacturing in Mexico

Global supplier expands manufacturing in Mexico

24 Jan 2014

Category: Automotive Manufacturing

For companies hoping to maximize production and distribution, manufacturing in Mexico presents a number of opportunities and benefits. Especially in the automotive market, international competition and cross-border regulatory obstacles have put pressure on multinational enterprises to locate partnerships in foreign markets. To develop and expand manufacturing facilities and offshore production, many businesses have begun expanding to Mexico. The country has developed a rich history connected to the automotive industry as a producer of vehicles in addition to constructing car and truck components. Several businesses have recently announced their intentions to take advantage of the skilled and cost-effective Mexican labor force.

Hella Group adds to production facilities in Mexico
According to Automotive Business Review, the electronics supplier Hella Group is adding its fifth plant in Mexico in support of the robust automotive sector that has been established in the nation. The $90 million manufacturing plant is located in the central Mexican city Irapuato, Guanajuato, and will likely bolster the region as a key component of the vehicle supply chain. Hella anticipates the facility will achieve a capacity of 1.2 million head lamps and 2.4 million rear lamps.

"Our investment here is a key piece to HELLA's continued growth and will contribute to the development of the City of Irapuato, the State of Guanajuato and Mexico," Rolf Breidenbach, Hella Group management board chairman, explained.

The move is part of a larger global initiative to become deeply integrated in the automotive supply chain. With close proximity to the North and South American customer markets, Mexico is a strategically significant location for manufacturers. In fact, the lamps produced in the Irapuato facility are bound for the U.S., Canada and Mexico's Latin American trade partners. Both consumer demographics are important segments for those in the automotive industry, and trade agreement among various countries in the region make manufacturing in Mexico a tactically smart decision.

Engine supplier expands operations
BorgWarner, a key partner in the automotive supply chain recently released details of its plans to begin manufacturing engine timing systems in El Salto, Mexico, according to a press release. The move comes as a result of an arrangement with the European automaker Volkswagen, which has a engine production facility in Silao, Mexico. The strategy aims to take advantage of a localized supply chain involving component parts and vehicle manufacturing centralized in Mexico. The vehicles produced at the Volkswagen plant using BorgWarner supplies are destined for the U.S. consumer market. The German automaker hopes to produce 300,000 engines annually at its new facility with the help of a local supply chain.

"BorgWarner's advanced engine timing technologies reduce friction and weight to help improve fuel economy," indicated Joe Fadool, vice president and general manager at the international parts supplier.

Advanced manufacturing techniques require workers that have technical skills and experience. The labor market in Mexico helps hi-tech companies reach their desired markets and remain competitive by providing the high quality products and components.


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