Japan auto suppliers to invest US$ 100 million in Mexico

Japan auto suppliers to invest US$ 100 million in Mexico

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Japanese autoparts and materials makers will invest more than US$ 100 million over the next couple of years to open new production facilities in Mexico and take advantage of its low costs and free trade agreements with countries including the U.S., according to the Nikkei Asian Review.

Bearings maker NSK plans to start mass-producing automatic-transmission clutches for midsize and large vehicles in central Mexico next year. The new plant, in the state of Guanajuato, is being set up by group member NSK-Warner at a cost of 2 billion yen (US$ 19.5 million).

Riken is also gearing up to begin operations at a 2 billion yen (US$ 19.5 million) Mexican plant next year to supply piston rings to Japanese automakers. The major engine parts manufacturer intends to raise output capacity there from the initial 1.6 million units a month to 3 million by 2020. Riken controls about 20% of the global market for automobile piston rings and aims to lift its share to 30% by 2020 by stepping up investment in such countries as Mexico.

Kasai Kogyo plans to spend as much as 2.5 billion yen (US$ 24.3 million) to build a third Mexican plant, expected to more than triple annual capacity for automobile interior ceiling parts to 800,000 vehicles around fiscal 2018.

Asahi Kasei aims to start turning out resin raw materials there in 2018 or 2019. With an up to 4 billion yen (US$ 39 million) budget for the project, the chemical company is focusing on central Mexico as it scours the country for an ideal location.

Helped by tariff-free auto exports to the U.S. courtesy of the North American Free Trade Agreement, auto production in Mexico has continued to grow except for a dip in 2009 due to the global financial crisis. Output there rose 6% from the previous year to roughly 3.4 million vehicles in 2015, according to MarkLines, making Mexico the world's seventh-largest automaking country.